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56 

R& 


[anisation  of  Industry  Series.     III. 

IC-NRLF 


SB    237    DM3 


SOME  ECONOMIC  ASPECTS 

OF 

INTERNATIONAL 
RELATIONS. 


Commercial  Policy  and  our 

Food  Supply       -       -    H,  SANDERSON  FURMSS,  MJL 
The  Influence  of  the  War  on 

Commercial  Policy     -    EDWIN  CANNAN,  M.A.,  LLJD8 
Capitalism  and  International 

Relations     ~  «    A,  E.  2IMMERN, 


1/.  net, 

post  free. 


LUSKIN   COLLEGE,   OXFORD. 


PUBLISHED  BY  THE  COUNCIL   OF 
RUSKIN  COLLEGE. 


The  Reorganisation  of  Industry  Series.    ID. 

SOME  ECONOMIC  ASPECTS  OF 

INTERNATIONAL 
RELATIONS. 


PAPERS 

BY 

H.  SANDERSON  FURNISS,   M.A. 
EDWIN  CANNAN.  MA.  LL.D. 
A.  E.  ZIMMERN,   M.A. 

With  Criticisms. 


7d.  ,n3t. 


RUSKIN   COLLEGE,   OXFORD. 


BIRMINGHAM  : 
BIRMINGHAM  PRINTERS,  LTD.,  42-44,  HILL  STREET. 

1917 


PREFATORY  NOTE. 


S  the  College  buildings  are  still  in  the  hands  of  the  Government, 
and  as  the  times  do  not  yet  allow  of  our  resuming  the 
residential  side  of  our  work,  the  Council  thought  that  the  College 
could  most  usefully  supplement  our  teaching  by  correspondence, 
and  help  to  promote  the  study  of  social  and  industrial  questions,  by 
continuing  its  policy  of  holding  from  time  to  time  national  conferences 
of  the  representatives  of  working-class  bodies. 

At  Oxford  and  Bradford  the  questions  discussed  were,  for  the  most 
part,  national  in  their  scope.  But  at  our  Birmingham  conference 
we  thought  it  wise  to  take  a  wider  survey  and  to  consider  "  Seme 
Economic  Aspects  of  International  Kelations." 

The  principal  topic  of  my  own  paper  was  suggested  by  a  question 
raised  by  Mr.  C.  S.  Orwin  in  the  paper  he  contributed  to  our  Bradford 
3onference,  namely,  as  to  whether  it  was  desirable  to  subsidise  British 
igriculture  as  a  measure  of  defence.  This  question  seemed  to  me  so 
important  as  to  deserve  further  elaboration  and  a  fuller  discussion 
than  it  was  found  possible  to  give  it  at  Bradford. 

The  College  is  fortunate  in  having  secured  a  paper  from  Professor 
Cannan  ;  and  Mr.  A.  E.  Zimmern,  who  contributed  a  paper  entitled 
;'  The  Control  of  Industry  "  to  the  first  volume  of  this  series,  has  placed 
us  under  a  new  debt  of  obligation.  Our  thanks  are  also  due  to  Mr.  E.  A. 
Mabbs,  Mr.  E.  J.  Naylor,  and  Mr.  3.  G.  Newlove,  for  leading  the 

discussions. 

H.  SANDERSON  FURNISS, 

Principal  of  Ruskin  College 
Oxford,  October,  1917. 


onoo  A 


SOME  ECONOMIC  ASPECTS  OF 
INTERNATIONAL  RELATIONS. 


AN  ACCOUNT  OF  PROCEEDINGS  AT  THE  NATIONAL 
CONFERENCE  OF  WORKING-CLASS  ASSOCIATIONS 
HELD  IN  BIRMINGHAM  ON  SEPT.  21st  and  22nd,  1917. 

(Notes  taken   by   R.    T.    HUNT,    Oxford.) 


FIRST     SESSION. 

Mr.  James  Bell  (Amalgamated  Weavers'  Association),  in  taking  the 
chair,  said  he  would  like  to  make  a  few  remarks  on  the  work  of  Ruskin 
College.  In  ordinary  times  there  were  resident  students  drawn  from  work- 
ing-class organisations,  e.g.,  from  Trade  Unions,  Co-operative  Societies, 
and  the  Club  and  Institute  Union,  and  sent  to  the  College  to  be  trained, 
not  to  lift  them  out  of  the  movement,  but  to  make  them  more  useful 
in  it.  The  government  of  the  College  was  in  the  hands  of  working-class 
organisations,  and  there  was  therefore  every  reason  why  working-class 
organisations  should  support  the  College.  During  the  war  it  had  not 
been  possible  to  carry  on  the  work  in  the  ordinary  way,  as  the  College 
was  being  used  by  the  War  Office  as  a  home  for  nurses.  After  the 
war  it  was  intended  to  take  up  the  full  work  again  and  to  go  on  with  it. 
In  the  meantime,  it  was  desired  that  the  usefulness  of  the  College 
should  be  continued,  and  conferences  had  been  organised  so  that  sub- 
jects of  interest  to  the  working-class  and  labour  movements  could  be 
brought  before  the  people  inl crested. 


COMMERCIAL  POLICY  AND  OUR 
FOOD   SUPPLY. 

By  H.  SANDERSON  FURNISS,  M.A., 

Primipal  of  Ruskin  College. 


Very  few,  if  any,  of  the  problems  with  which  society  is  confronted 
can  be  solved  by  reference  to  economic  considerations  alone.  For 
instance,  they  are  almost  always  capable  of  being  regarded  also  from 
an  ethical  and  political  aapect. 

Though  the  subject-matter  of  economics  is  wealth,  it  should  always 
be  borne  in  mind  that  wealth  is  only  one  of  the  means  to  well-being, 
which  itself  also  depends  upon  the  attainment  of  high  ethical  standards 
and  satisfactory  political  relations.  This  does  not  mean,  of  course, 
that  there  are  no  economic  problems  apart  from  ethics  and  politics. 
On  the  contrary,  problems  must  be  isolated  and  considered  from  their 
different  points  of  view.  A  surgeon  who  specialises  on  the  heart  will 
realise  that  he  cannot  consider  the  heart  entirely  apart  from  the  nervous 
system,  the  lungs,  the  digestive  organs,  etc.- — in  fact,  he  must  know 
something  of  the  body  as  a  whole  ;  that,  however,  will  not  prevent  his 
becoming  a  heart  specialist.  The  business  of  the  economist  is  to  be 
able  to  say  :  "If  you  want  the  largest  possible  production  of  material 
goods,  you  must  follow  such  and  such  a  course  "  ;  of  the  political 
philosopher  to  point  out  that  such  and  such  a  course  must  be  followed . 
if  good  government  at  home  and  satisfactory  relations  abroad  are  to 
be  secured  ;  of  the  moral  philosopher  to  show  us  how  to  live  aright 
and  lead  the  good  life.  It  may  be  necessary  that  each  should  criticise 
the  others,  thus  :  "  If  we  proceed  along  your  lines  production  may  be 
curtailed,  political  relations  may  be  disturbed,  or  the  sum  of  human 
happiness  diminished,"  as  the  case  may  be.  Prospects  of  wealth, 
then,  may  have  to  be  relinquished  for  the  sake  of  good  government, 
or  the  pursuit  of  riches  abandoned,  or  political  relations  endangered 
for  the  sake  of  maintaining  what  is  believed  to  be  a  right  ethical 
standard. 

This  line  of  thought  is  particularly  applicable  to  the  problems 
connected  with  foreign  trade  and  with  commercial  policy  in  general, 
and  also  to  the  particular  problems  here  under  discussion — viz.,  the 
problem  of  our  food  supply  ;  for  in  both  the  general  and  particular 
questions,  ethical  and  political,  as  well  as  economic  matters,  are  all 
very  definitely  involved." 


To  the  economist  the  object  of  foreign  trade  is  identical  with  the 
object  of  all  exchange — viz.,  the  increase  of  utility — the  increase, 
not  necessarily  of  national  wealth,  but  of  the  wealth  of  nations.  The 
political  philosopher,  however,  knows  that  at  times  sacrifices  of  economic 
advantage  may  have  to  be  made  in  order  to  secure  political  ends — 
for  instance,  to  consolidate  an  empire,  to  secure  the  adhesion  of  allies, 
or  for  purposes  of  defence ;  while  again,  the  moral  philosopher  may 
urge  that  the  advice  of  the  economist  cannot  be  taken  without  qualifica- 
tions if  the  moral  standards  are  not  to  be  lowered,  or  if  moral  obligations 
are  to  be  fulfilled — for  instance,  the  boycott  of  goods  made  under 
conditions  of  slavery,  the  abandonment  of  trade  in  deleterious  products, 
such  as  opium,  or  the  carrying  out  of  a  commercial  treaty. 

Before  the  outbreak  of  the  present  war,  what  is  known  as  the  fiscal 
question,  raised  by  Joseph  Chamberlain,  had  divided  opinion  on 
commercial  policy,  and  had  been  before  the  nation  at  every  General 
Election  since  1903.  On  the  one  hand,  it  was  urged  that  the  time  had 
come  for  a  departure  from  the  Free  Trade  policy  to  which  we  had 
adhered  since  1846.  On  the  other  hand,  it  was  maintained  that  the 
reasons  alleged  were  not  of  sufficient  weight  to  justify  a  change,  and 
that  our  existing  policy  was,  under  prevailing  conditions,  the  best 
that  could  be  devised — at  any  rate,  from  the  point  of  view  of  the 
United  Kingdom. 

Throughout  the  almost  ceaseless  discussions  which  were  carried  on 
during  those  years  while  political  and  moral  considerations  were 
adduced,  both  in  support  of  change  and  in  support  of  the  maintenance 
of  the  status  quo,  economic  considerations  were  certainly  most  pro- 
minently before  the  public.  This  is  perhaps  more  strictly  true  of  the 
defenders  of  Free  Trade  than  of  the  advocates  of  change.  But  on  both 
sides  the  political  and  moral  considerations,  when  brought  forward,  were 
as  a  rule  given  a  secondary  place.  When  the  war  is  over,  and  the  time 
comes  for  bringing  the  whole  subject  once  more  under  review,  it  seems 
certain  that  political  and  moral  considerations  will  play  a  more  important 
part  than  they  did  in  the  pre-war  period.  The  resolutions  passed  at 
the  Paris  Conference  in  1916  suggest  that  this  will  be  the  case,  and  it 
seems  clear  that  the  problem  of  regulating  trade  with  reference  to 
measures  of  defence,  and  the  problem  of  binding  the  Empire  more 
closely  together  by  means  of  fiscal  ties,  will  carry  more  weight  than  they 
did  formerly,  while  other  new  and  non-economic  considerations,  such 
as  the  idea  of  arranging  our  trade  relations  so  that  they  may  benefit 
our  Allies  to  a  greater  extent  than  neutral  countries,  and  so  that  they 
may  benefit  our  former  enemies  as  little  as  possible,  may  have  their 
place  in  the  discussions  that  will  arise. 

When  all  this  is  admitted,  however,  it  must  not  be  forgotten  that 
there  are  economic  principles  underlying  foreign  trade — principles 
which  cannot  be  negleoted  in  the  formulation  of  a  commercial  policy. 

It  is  sometimes  said  that  the  old  fiscal  question  is  dead — that  the 
conflict  is  no  longer  one  between  Free  Trade  and  Protection,  and  that 
it  has  been  moved  on  to  new  and  broader  lines.  It  is  probably  true 


8 

that  after  the  war  the  question  will  not  be  debated  quite  on  the  same 
lines  as  hitherto,  and  the  point  at  issue  will  not  be  merely  the  desirability 
of  a  departure  from,  or  the  maintenance  of,  Free  Trade.  Political 
and  moral  considerations,  as  I  have  already  suggested,  will  be  brought 
into  the  foreground  ;  and  in  addition  to  this,  new  economic  considera- 
tions will  be  put  forward.  The  erection  of  a  tariff,  for  instance,  may  be 
advocated  on  political  or  ethical  grounds,  but  it  may  be  possible  to 
show  that  the  political  or  ethical  ends,  which  it  is  desired  to  promote 
by  means  of  a  tariff,  can  be  equally  well  secured  by  adopting  some  other 
course  which  would  also  be  more  advantageous  from  the  economic 
point  of  view. 

I  do  not,  however,  believe  that  the  old  controversy  between 
Protectionists  and  Free  Traders  is  dead  ;  for  at  its  very  roots  there 
still  lies,  as  it  has  lain  from  the  days  of  the  mercantilists,  the  funda- 
mental difference  between  those  who  look  upon  foreign  trade  from  the 
national,  and  those  who  regard  it  from  the  international,  standpoint ; 
and  as  long  as  this  is  so,  the  economic  principles  underlying  foreign 
trade  cannot  be  thrown  on  the  scrap-heap. 

While  recognising,  then,  that  our  commercial  policy  can  at  no  time 
be  decided  by  economic  considerations  alone,  and  that  still  less  is  this 
likely  to  be  possible  after  the  war,  it  seems,  nevertheless,  well  worth 
while  to  reconsider  once  more  the  economic  principles  on  which  com- 
mercial policy  has  hitherto  been  largely  based  ;  for  should  it,  after  the 
war,  be  found  desirable  to  give  greater  weight  to  political  and  moral 
considerations  than  to  economic  motives,  it  is  of  the  utmost  importance 
that  we  should  realise  that  we  are  adopting  a  policy  which,  though 
framed  with  the  object  of  securing  some  moral  or  political  ends,  is 
economically  unsound.  We  must  be  quite  clear  that  we  are  not  being 
rushed  into  a  commercial  policy  for  political  or  ethical  ends  in  the 
belief  that  it  is  also  the  policy  which  is  economically  the  most  advan- 
tageous ;  and  I  propose,  therefore,  to  re-state  once  again  the  economic 
principles  which  were  believed  to  underlie  our  commercial  policy 
before  the  war. 

A  great  deal  of  time  and  paper  have  been  expended  by  English 
economists,  especially  of  the  older  school  (economists  in  other  countries 
have  not,  as  a  rule,  followed  their  example)  in  elaborating  a  special 
theory  of  foreign  trade — or  of  international  trade,  as  they  usually 
call  it — and  even  a  special  theory  of  international  value.  Foreign 
trade  is,  on  the  whole,  a  more  satisfactory  term,  for  trade  is,  strictly 
speaking,  not  international.  When  we  speak  of  British  trade,  French 
trade,  German  trade,  and  so  on,  what  is  really  me.ant  is  trade  carried 
on  by  individual  Englishmen  or  individual  Frenchmen  with  individuals 
living  in  other  countries,  and  not  trade  between  nations  in  the  strict 
sense,  such  as  would  be  the  exchange  of  Ireland  for  Java  by  England 
and  Holland  ! 

Nor  is  there  any  fundamental  difference  between  the  principles 
underlying  foreign  trade — i.e.,  the  exchange  of  goods  and  services 
between  individuals  living  in  different  countries — and  the  principles 


9 

underlying  the  exchange  of  goods  and  services  between  individuals 
living  in  the  same  country.  What  differences  there  are  are  not  differ- 
ences in  kind.  But  when  it  is  said  that  foreign  trade  is  trade  between 
individuals,  it  is  not  intended  to  suggest  that  foreign  trade  is  a  matter 
of  no  interest  to  nations  as  a  whole,  or  that  each  individual  State  is 
to  leave  its  citizens  to  carry  on  foreign  trade  with  complete  freedom 
from  control ;  for  foreign  trade  is  of  the  greatest  importance,  not  merely 
to  individuals  who  engage  in  it,  but  to  the  countries  to  which  those 
individuals  belong.  Just  as  a  wise  State  controls  its  domestic  industry 
and  imposes  restraints  to  individual  liberty  when  this  appears  to 
conflict  with  the  general  good,  so  also  it  may  be  necessary  for  a  wise 
State  to  place  limits  to  the  absolute  freedom  of  individuals  with  regard 
to  the  carrying  on  of  foreign  trade.  State  control  in  some  directions 
may  even  be  more  necessary  in  foreign  than  in  domestic  trade,  for  in 
the  former,  international  relations  may  be  involved  which  can  only 
be  arranged  by  those  who  can  speak  as  national  representatives,  with 
the  authority  of  the  State  behind  them.  Even  if  it  be  admitted, 
however,  that  State  control  is  more  necessary  in  foreign  than  in  domestic 
trade,  the  difference  is  one  of  degree,  not  of  principle. 

Another  difference  between  foreign  and  domestic  trade  on  which  a 
good  deal  of  stress  has  been  laid  in  the  past  is  that  labour  and  capital 
are  less  mobile  as  between  nations  than  they  are  within  a  single  country. 
This,  again,  is  a  difference  in  degree,  and  not  one  of  principle,  and  it 
is  easy  to  exaggerate  it,  for  neither  labour  nor  capital  is  perfectly 
mobile  within  a  single  country,  and  capital  is  now  practically  as  mobile 
as  between  different  countries  as  it  is  within  a  single  country.  The 
great  bulk  of  the  capital  used  in  trade  and  industry  consists  of  plant, 
buildings,  machinery,  and  other  things  which  cannot  easily  be  moved 
from  one  part  of  the  country  to  another,  while  the  capital  which  is 
mobile  is  new  capital — that  is,  money  or  some  form  of  purchasing  power 
which  has  not  yet  embodied  itself  in  concrete  production-capital,  and 
which  can  move  as  easily  from  London  to  New  York  as  from  London 
to  Manchester. 

There  are,  however,  some  definite  factors  to  be  taken  into  con- 
sideration, which  act  as  impediments  to  foreign  trade,  and  which  do 
not  appear  at  all  in  connection  with  domestic  trade — namely,  differences 
in  climate,  in  natural  resources,  and  in  language.  Differences  in 
climate  account  to  a  great  extent  for  differences  in  conditions  of  labour 
in  different  countries,  and  for  differences  in  wage  rates.  Differences 
in  natural  resources  largely  account  for  the  direction  which  production 
takes  in  various  parts  of  the  world — i.e.,  the  kind  of  goods  produced  ; 
while  the  fact  that  difference  in  language  is  an  impediment  to  exchange 
requires  no  explanation.  In  addition,  national  characteristics,  national 
customs,  and  national  sentiment  still  count  for  a  good  deal,  and  make 
trade  between  the  inhabitants  of  different  countries  less  easy  to  carry 
on  than  trade  within  a  single  country.  Again,  differences  in  the  form 
of  government  in  different  countries,  the  absence  of  a  uniform  currency 


10 

and  commercial  legislation — particularly  when  it  takes  the  form  of 
tariffs — have  to  be  taken  into  consideration. 

All  these  factors  have  to  be  borne  in  mind  when  examining  the 
economic  principles  underlying  foreign  trade,  for  they  affect  the 
exchange  of  goods,  although  they  do  not  alter  the  principles  upon 
which  goods  are  exchanged.  They  make  foreign  trade  a  somewhat 
less  simple  thing  than  home  trade,  but  they  do  not  make  necessary  a 
special  theory  of  value. 

It  is  frequently  said  that  foreign  trade  is  simply  a  matter  of  barter, 
goods  being  exchanged  for  goods,  and  exports  and  imports  tending  to 
balance  one  another.  These  statements  are  broadly  true,  though  at 
first  sight  they  are  far  from  apparent ;  for  a  glance  at  the  foreign  trade 
returns  of  any  year  is  sufficient  to  show  that  some  countries,  like  Great 
Britain,  appear  to  import  far  more  than  they  export ;  while  the  exports 
of  other  countries,  like  India,  exceed  their  imports.  This  was,  at  any 
rate,  the  case  before  the  war.*  The  facts,  therefore,  do  not  at  first 
sight  appear  to  bear  out  the  theory. 

The  following  problem  also  naturally  arises  :  the  ultimate  object  of 
all  the  individuals  who  engage  in  foreign  trade  is  to  be  paid  in  money 
for  the  goods  they  sell ;  but  if  foreign  trade  is  nothing  but  barter, 
how  do  they  manage  to  succeed  in  this  object  ? 

The  way  out  of  the  first  difficulty  is  not  hard  to  find,  for  the  statement 
that  exports  tend  to  pay  for  imports,  and  vice  versa,  requires  the 
explanation  that  in  foreign  trade,  just  as  in  domestic  trade,  services 
as  well  as  goods  are  exchanged.  The  principal  services  exchanged  by 
the  people  of  the  United  Kingdom  with  the  peoples  of  other  countries 
are  those  rendered  by  our  carrying  trade  and  by  loans  of  capital  to 
other  countries,  and  neither  the  earnings  of  our  carrying  trade  nor  the 
interest  paid  on  capital  abroad  appear  in  the  Trade  returns.  If  these 
are  added  to  our  exports,  together  with  the  payments  for  some  minor 
services,  it  will  be  found  that  our  exports  do  approximately  balance 
our  imports  ;  and  the  same  thing  is  true  of  the  trade  of  the  world, 
though  at  no  given  moment  is  there  an  exact  balance  of  exports  and 
imports  between  the  various  countries. 

The  answer  to  the  question  :  How  is  it  that  those  who  are  engaged 
in  foreign  trade  ultimately  obtain  payment  in  money,  in  spite  of  the 
fact  that  foreign  trade  is  barter  ? — is  less  easy  to  state  in  a  few  words, 
and  I  have  not  space  for  many.  A  complete  answer  would  involve  an 
explanation  of  the  mechanism  of  the  foreign  exchanges  ;  but,  put 
very  shortly,  it  is  that  those  who  engage  in  foreign  trade  ultimately 
receive  payment  in  money  for  the  goods  they  sell  through  the  medium 
of  bills  of  exchange  or  other  instruments  of  credit. 


*  Imports  into  the  United  Kingdom,  1913  . . .     £768,734,739 
Exports  from  „  »  „  £525,245,289 

Imports  into  India,  191203  £152,307,"00 

Exports  from      ,,  „  , £171,233,000 

Statistical  Abstract 


11 

The  system  works  out,  broadly  speaking,  and  taking  the  simplest 
possible  case,  somewhat  as  follows  :  If  an  Englishman  buys  goods 
from  a  Frenchman,  the  Frenchman  ultimately  receives  payment  for 
them  in  money  from  another  Frenchman,  who  has  bought  goods  from 
another  Englishman,  and  who  owes  him  money  for  what  he  has  bought. 
The  second  Englishman  is  ultimately  paid  for  the  goods  he  has  sold 
to  the  second  Frenchman  by  the  first  Englishman  who  owes  money  to 
the  first  Frenchman.  This  roundabout  business  is  going  on  on  a  large 
scale  all  the  time  all  over  the  world,  and  it  is  conducted  by  means  of 
bills  of  exchange  and  other  instruments  of  credit,  which  for  the  most 
part  consist  of  pieces  of  paper  from  one  man  telling  some  other  man  to 
pay  him  or  somebody  else  a  certain  sum  of  money  by  a  certain  time. 
By  this  means  everybody  ultimately  gets  paid  in  money,  though  very 
little  passes  from  country  to  country,  so  that  trade  is  kept  in  what 
is  in  essence  a  state  of  barter.  Practically  the  whole  of  this  financial 
side  of  international  exchange  is  conducted  by  the  banks  and  discount 
houses,  which  act  as  intermediaries  beween  buyers  and  sellers. 

This  is,  of  course,  a  very  incomplete  explanation  of  a  very  intricate 
subject,  but  it  may,  I  hope,  be  sufficient  to  show  that  in  course  of  time 
an  elaborate  and  delicate  mechanism  has  gradually  been  built  up  which 
greatly  facilitates  the  exchange  of  goods  between  the  peoples  of  different 
countries. 

The  foregoing  explanations  appeared  to  be  necessary  for  a  complete 
understanding  of  the  principles  which  underlay  our  commercial  policy 
before  the  war.  This  policy — the  Free  Trade  policy,  as  it  was  called — 
was  based  on  the  view  that  the  economic  interests  of  the  country  were 
best  promoted  by  freely  admitting  all  the  goods  we  wished  to  buy 
from  other  countries,  with  the  exception  of  a  very  small  number  of 
commodities  upon  which  customs  duties  were  imposed  for  revenue 
purposes  only.  It  was  held  by  the  supporters  of  this  policy  that  it  was 
to  the  advantage  of  the  country  to  obtain  the  goods  it  required  from 
those  parts  of  the  earth  where  they  could  be  produced  most  advan- 
tageously either  as  to  quality  or  cost,  and  that  we  should  devote  our- 
selves to  forms  of  production  which  we  could  carry  on  better  and  more 
cheaply  than  our  neighbours. 

We  were  dependent  on  foreign  countries  for  much  of  our  raw  material, 
some  of  which  we  could  not  produce  at  all  ourselves,  and  for  a  very 
large  proportion  of  our  food,  which  we  could  not  produce  so  cheaply 
as  other  countries  ;  while  we  had,  on  the  other  hand,  succeeded  in 
securing  a  pre-eminence  in  certain  branches  of  manufacture. 

As  imports  are  paid  for  by  exports,  and  vice  versa,  it  was  believed — 
at  all  events  by  Free  Traders — that  any  check  to  our  imports  would 
be  followed  sooner  or  later  by  a  corresponding  check  to  our  exports, 
and  that  the  most  likely  way  of  inducing  other  countries  to  follow  our 
example  was  to  abide  by  Sir  Kobert  Peel's  maxim  :  "  The  only  way  of 
fighting  hostile  tariffs  is  by  free  imports."  In  defence  of  this  policy 
it  must  be  admitted  that  we  did  succeed  in  obtaining  most -favoured- 


12 

nation  treatment  from  practically  all  the  protectionist  countries  of  the 
world. 

If  the  civilised  world  consisted  of  one  single  State  it  can  hardly  be 
doubted  that  universal  Free  Trade  would  be  the  most  satisfactory 
policy  for  it  to  adopt— at  any  rate,  from  the  purely  economic  standpoint; 
and  it  is  mainly  owing  to  the  fact  that  the  civilised  world  is  split  up 
into  separate  and  independent  States  that  a  different  policy  has  been 
adopted  by  almost  every  country  except  our  own.  It  is  certainly 
remarkable,  that  in  spite  of  the  machinery  that  has  been  devised  for 
facilitating  foreign  trade,  and  in  spite  of  the  fact  that  there  are  already 
obstacles  to  exchange  between  the  inhabitants  of  different  nations, 
which  are  not  present  to  the  same  extent  in  the  case  of  trade  within 
a  single  nation,  that  almost  ever  since  there  was  anything  worthy  of 
the  name  of  foreign  trade  the  nations  have  vied  with  one  another  in 
erecting  barriers  in  the  form  of  tariffs,  with  the  object  of  making  the 
exchange  of  goods  between  different  countries  still  more  difficult. 
The  explanation  of  this  is  to  be  found  mainly  in  the  importance  attached 
to  the  furthering  of  national  interests,  and  in  the  fact  upon  which  I  have 
already  insisted,  viz.,  that  regard  for  national  interests  may  make  it 
necessary  that  economic  considerations  should  in  some  instances  give 
way  to  political  or  other  considerations  which  are,  or  appear  to  be, 
paramount. 

While  protection  has  been  adopted  largely  for  political  and  other 
non-economic  reasons,  it  has  generally  been  defended  as  being  also 
the  best  policy  from  an  economic  point  of  view.  Tariffs  are,  of  course, 
erected  for  purposes  other  than  pure  Protection.  They  are  set  up  as 
a  means  of  raising  revenue,  or  as  a  means  of  bargaining  with  other 
Protectionist  nations,  or  as  a  weapon  to  be  used  for  purposes  of 
retaliation. 

Leaving  these  uses  of  tariffs  on  one  side,  the  economic  arguments 
in  support  of  Protection  pure  and  simple  can  be  reduced  to  a  compara- 
tively small  compass.  They  are  all  based  on  the  belief  that  Protection 
is  necessary  for  the  increase  of  productive  power.  Thus,  the  protection 
of  infant  industries  is  urged  as  being  necessary  in  order  to  increase 
productive  power  in  the  future,  and  the  fostering  of  old  or  well-estab- 
lished industries  which  are  thought  to  be  weaker  than  their  foreign 
rivals  is  also  advocated  in  order  to  prevent  the  diminution  of  productive 
power.  It  is  believed  that  national  power  and  national  greatness 
depend  largely  upon  the  fullest  and  most  productive  employment  of 
a,  nation's  labour  and  capital  ;  and  that  these  are  best  secured  by 
protecting  national  industries  from  foreign  competition.  The  erection 
of  tariffs  is  by  no  means  the  only  method  by  which  the  policy  of 
Protection  can  be  carried  out.  Industries  may  be  protected  by  means 
of  bounties  or  other  forms  of  Government  subsidy,  and,  in  fact,  wherever 
national  funds  are  devoted  to  the  support  or  encouragement  of  any 
particular  industry  or  group  of  industries,  such  industries  may  be 
fairly  described  as  protected 


13 

I  have  tried  to  state  as  succinctly  as  possible  the  principles  under- 
lying the  policy  of  Free  Trade  and  the  policy  of  Protection,  but  I  do 
not  propose  to  examine  or  discuss  the  arguments  for  or  against  either 
policy  :  that  has  been  already  done  ad  nauseum.  It  does,  however, 
seem  desirable,  when  a  change  of  policy  with  regard  to  a  particular 
industry  like  agriculture  is  recommended  largely  on  non-economic 
grounds,  to  examine  the  question  as  to  whether  economic  considerations 
can  be  altogether  set  on  one  side — or  at  any  rate,  what  the  result  is 
likely  to  be  if  they  are  neglected- — and  I  now  turn  more  directly  to 
the  subject  with  which  this  paper  is  to  deal — namely,  commercial 
policy  in  relation  to  our  food  supply. 

The  change  which  is  now  widely  demanded  with  regard  to  our  food 
supply  may  be  stated  in  a  very  few  words.  It  is  that  we  should  produce 
more  of  our  food  in  our  own  country,  and  purchase  less  of  it  from  over- 
seas ;  and  the  principal  argument  for  the  change  is  the  necessity  of 
greater  security  in  time  of  war.  Other  reasons  are  also  brought  forward, 
such  as  the  desirability  of  our  having  a  larger  rural  population,  the 
suitability  of  agriculture  as  a  means  of  employment  for  ex-soldiers, 
its  general  advantages  over  town  industries  in  the  matter  of  health, 
and  other  arguments  based  on  social  and  ethical  considerations,  The 
main  argument,  however,  is  the  argument  for  defence. 

The  questions  I  propose  to  examine  are  :  first,  whether  the  change 
proposed  with  regard  to  our  food  supply  for  defensive  purposes,  and 
the  methods  suggested  for  bringing  it  about,  can  be  justified  in  any 
degree  on  economic  grounds  ;  and,  secondly,  if  not,  whether  it  is 
desirable  to  adopt  measures  which  are  based  on  non-economic  con- 
siderations — that  is,  whether  it  is  desirable  to  "  sacrifice  opulence  for 
defence." 

It  appears  necessary  to  raise  the  first  question,  as,  although  agri- 
cultural reform  is  urged  mainly  on  grounds  of  defence,  it  is  frequently 
claimed  that  measures  which  are  said  to  be  necessary  for  national 
security  will  also  be  economically  advantageous.  Thus,  Mr.  A.  D.  Hall 
writes  :  "  We  take  as  starting-point  that  the  State  must  secure  the 
more  intensive  cultivation  of  the  land  of  the  United  Kingdom  and  an 
increasing  employment  of  men  upon  the  land  both  as  an  insurance 
against  war  and  as  a  means  of  reducing  the  national  indebtedness. 
The  process  of  readjustment  may  involve  some  cost  to  the  State  ; 
but  the  necessity  is  as  great  as  that  of  maintaining  an  army  or  a  navy, 
with  this  difference,  that  the  expenditure  is  only  an  investment  on  which 
a  commercial  return  will  be  obtained  as  soon  as  the  readjustment  is 
complete."* 

Before  the  outbreak  of  the  present  war  we  imported  about  half 
of  our  total  food  supply,  including  four-fifths  of  our  wheat,  and  paid 
for  this  mainly  by  exporting  manufactured  goods. 

Now  it  is  unlikely  that  we  could  become  absolutely  self-sufficing 
as  regards  food  even  if  we  wished  to  do  so,  except  at  a  cost  which  would 


*  Agriculture  after  the  War  (A.  D.  Hall),  pp.  37-38.     The  italics  are  mine. 


14 

be  prohibitive ;  but  we  could  become  sufficiently  self-sufficing  to 
enable  us  to  meet  a  crisis — e.g.,  to  enable  us  to  hold  out  against  a 
blockade  lasting  for  a  considerable  period.  We  could  also  make 
ourselves  much  more  nearly  self -sufficing  in  normal  times  than  we  were 
formerly.  In  order  to  do  this,  a  considerable  increase  in  our  arable 
land  would  be  necessary,  and  a  large  amount  of  the  land  which  has 
been  put  down  to  grass  during  the  past  forty  years  would  have  to  be 
broken  up.  The  new  arable  land  would  be  the  means,  not  merely  of 
increasing  our  output  of  wheat,  but  on  it  agricultural  experts  believe 
that  we  could  also  maintain — if  not  surpass — our  present  output  of 
meat  and  milk  from  grass  land,  growing  foodstuffs  on  the  arable  land 
for  live  stock  as  well  as  for  human  beings.  In  a  national  emergency 
we  could  live  on  our  live  stock,  and  grow  more  food  on  our  arable  land 
for  ourselves. 

But  the  immediate  economic  advantage  of  such  a  reform  is, 
apparently,  not  sufficiently  certain  to  induce  agriculturists  to  carry 
it  out  without  very  definite  guarantees  from  the  State,  and  if  the  change 
is  to  be  made  at  all — at  all  events,  in  time  to  be  of  any  use  in  the  present 
crisis — it  is  maintained  by  those  who  recommend  it  that  British  agri- 
culture will  have  to  become  a  State-subsidised  industry. 

During  a  great  national  crisis  like  that  involved  by  the  present  war, 
a  discussion  of  the  economic  effects  of  a  particular  policy  is  not  likely 
to  receive  much  attention,  for  most  people  seem  to  be  ready  to  adopt 
almost  any  heroic  remedy  which  is  suggested  without  stopping  to 
count  the  cost ;  and  there  is,  perhaps,  something  to  be  said  for  this 
light-hearted  recklessness  during  a  national  crisis.  But  when  changes 
are  recommended,  not  merely  for  the  purposes  of  the  war,  but  with 
the  intention  that  they  should  be  continued  into  the  post-war  period — 
when  it  is  hoped  in  many  quarters  that  reforms  possibly  made  necessary 
by  the  war  may  become  part  of  the  permanent  policy  of  the  country — 
then  it  is  important  that  they  should  be  scrutinised  with  the  greatest 
care. 

That  the  agricultural  reforms  which  are  now  being  recommended 
in  the  first  instance  as  war  measures,  are  also  intended — at  any  rate, 
by  some  of  their  exponents— to  apply  to  agriculture,  if  not  permanently, 
for  a  great  number  of  years  after  the  war,  may  be  seen  from  the  following 
quotation  from  the  report  of  Lord  Selborne's  Committee :  "  We  are 
confident  that  as  the  years  pass  by  and  agriculture  becomes  more 
intensive  in  the  United  Kingdom,  an  increase  of  production  will  be 
reached  which  would  now  appear  impossible  to  any  farmers,  and  that 
if  the  agricultural  policy  which  we  recommend  is  carried  out  steadily 
and  continuously  a  great  change  will  be  effected  within  a  generation,"* 
the  policy  recommended  by  the  Committee  being  subsidies  to  agri- 
culture in  the  form  of  fixed  minimum  prices  for  wheat  and  oats. 


*Part  I  of  the  Report  of  the  Agricultural  Policj'  Sub-Committee, 
Cd.  8506  (p.  7). 


15 

How  far  can  such  a  change,  and  the  methods  proposed  for  bringing 
it  about,  be  regarded  as  in  the  best  economic  interests  of  the  country  ? 
The  fact  that  we  have  hitherto  imported  so  much  of  our  food  does  not 
of  itself  show  that  food  can  be  imported  more  cheaply  than  we  can 
grow  it  at  home  ;  for  it  is  possible  that  we  may  be  able  to  produce, 
e.g.,  both  wheat  and  certain  forms  of  manufactured  goods  more  cheaply 
than  can  be  done  in  Canada  or  Argentina.  But  even  if  this  were  so, 
it  might  still  be  to  our  advantage  to  devote  most  of  our  energies  to 
manufactures,  leaving  Canada  and  Argentina  to  supply  us  with  wheat. 

It  is,  however,  clear  that  most  of  the  food  we  have  hitherto  impoited 
we  have  imported  because  it  could  be  produced  more  advantageously 
as  regards  either  quality  or  cost  elsewhere  than  in  our  own  country. 
The  fact  that  we  are  told  that  the  only  way  in  which  we  can  become 
more  nearly  self-sufficing  as  regards  food  is  by  subsidising  agriculture — 
even  with  the  very  high  prices  at  present  prevailing — certainly  seems 
to  show  that  in  the  opinion  of  those  who  are  advocating  a  change  of 
policy  it  is  likely  to  be  more  economically  advantageous  for  us  to  buy 
than  to  produce  in  the  future. 

To  become  more  nearly  self-sufficing,  then,  would  mean  an  increase 
in  the  cost  of  production  of  the  nation's  food.  It  would  mean  that  we 
should  cease  to  buy  some  of  our  food  in  the  cheapest  market ;  and  this 
would  appear  to  show  that  the  methods  adopted  in  bringing  about 
such  a  change  cannot  be  justified  on  purely  economic  grounds.  It 
may,  of  course,  be  argued  that  the  plan  of  fixing  minimum  prices, 
either  on  all  wheat  and  oats  produced  in  the  country  and  brought  to 
market,  or  based  upon  the  acreage  under  wheat  and  oats,  will  not  in 
reality  cost  the  nation  anything  or  increase  the  price  of  food,  and 
that  it  is  most  improbable  that  prices  will  fall  below  the  minima 
suggested  for  many  years  to  come.  With  regard  to  the  possible  changes 
in  price  levels  after  the  war  it  is  impossible  to  speak  with  any  certainty. 
But  the  mere  fact  that  the  agriculturists  demand  guarantees  as  to 
prices  before  they  would  consent  to  make  the  changes  required,  and 
that  the  Government  thinks  it  necessary  to  give  the  guarantees 
demanded,  seems  to  show  that  a  fall  in  prices  immediately  after  the 
war  is  contemplated  as  being  at  least  within  the  bounds  of  possibility. 
If  it  is  certain  that  prices  will  not  fall  below  the  minima,  why  the 
alarm  of  the  agriculturists,  and  why  fix  the  minima  ? 

But  even  assuming  that  prices  will  not  fall  below  the  minima  sug- 
gested, the  cost  of  administering  any  scheme  for  subsidising  agriculture 
will  be  considerable.  The  work  of  the  Board  of  Agriculture  or  of  some 
other  Government  office  will  be  increased,  and  a  large  new  staff  of 
inspectors  will  have  to  be  employed,  the  cost  of  which  will  have  to  be 
borne  by  the  taxpayers. 

Again,  as  to  the  actual  changes  proposed  :  there  is  no  doubt  that 
we  could  largely  increase  the  output  of  wheat  and  oats  in  our  own 
country,  and  the  experts  appear  to  agree,  as  I  have  already  said, 
that  we  could  at  the  same  time  maintain — if  not  actually  augment— 
our  present  output  of  meat  and  milk.  But  the  question  cannot  be 


16 

regarded  with  reference  to  output  alone.  Output  must  be  considered 
in  relation  to  cost.  Net  product,  and  not  gross  product,  is  the  true 
test  of  economic  production.  It  is  generally  recognised  that  the 
production  of  meat  and  dairy  produce  on  arable  land  requires  more 
capital,  employs  more  labour,  involves  more  supervision,  and  is  exposed 
to  greater  risks  than  their  production  on  pasture.  But  as  to  whether 
the  actual  cost  is  greater  or  less  on  arable  than  on  grass  the  experts 
are  not  agreed,  and,  as  far  as  I  am  aware,  there  is  no  sufficient  data 
available  upon  which  to  form  an  opinion.  Nothing  can  be  gleaned 
on  the  point  from  Denmark,  where  dairy-farming  on  a  large  scale  is 
carried  on  upon  arable  land,  the  Danish  farmers  being  apparently 
quite  as  bad  at  account-keeping  as  our  own. 

The  point,  however,  is  one  upon  which  definite  conclusions  ought 
to  be  reached,  for  if  it  should  be  found  that  in  our  efforts  to  increase 
our  output  of  cereals  we  are  increasing  the  cost  of  production  of  meat 
and  dairy  produce,  the  case  for  making  the  change  is  materially 
weakened.  It  may  be  suggested  that  if  it  is  really  more  profitable  to 
produce  meat  and  dairy  produce  on  arable  land,  self-interest  would 
have  led  British  farmers  to  adopt  this  system  of  agriculture.  But  the 
British  farmer  does  not  look  at  profits  alone — or,  rather,  like  other 
business  men,  he  looks  at  net  profits,  not  at  gross  profits.  Arable  land, 
as  I  have  already  said,  needs  more  supervision  than  grass — that  is, 
more  work  for  the  farmer  himself — and  in  many  cases  he  sets  off  the 
possible  extra  profits  against  the  extra  work  and  additional  risks, 
and  decides  in  favour  of  a  smaller  but  more  certain  return  and  an  easier 
life  for  himself.  In  addition,  there  is  the  extra  capitalwhich  is  required, 
and  which  has  not  always  been  available. 

The  fundamental  point,  however,  which  must  not  be  lost  sight  of, 
is  whether  there  is  the  slightest  chance  in  the  near  future  of  our  being 
able  to  produce  the  wheat  we  require  as  cheaply  as  we  can  buy  it,  and 
if,  by  adopting  non-economic  methods  now,  we  can  build  up  a  system 
of  agriculture  which  will  eventually  be  able  to  hold  its  own  without 
artificial  aids,  and  also  supply  us  with  much  more  of  the  food  we 
require. 

It  will  simplify  the  problem  if  I  narrow  it  down  to  the  question  of 
wheat.  In  favour  of  our  being  able  to  produce  more  of  the  wheat 
we  require  as  cheaply  as  we  can  buy  it,  it  may  be  argued  that  forty 
years  ago  we  produced  a  great  deal  more  than  we  do  now,  and  immediately 
before  the  war  we  produced  one-fifth  of  our  total  wheat  supply  when 
the  price  was  32s.  9d.  a  quarter  ;  while  again,  an  even  larger  amount 
of  wheat  was  grown  in  1894  when  the  price  was  only  22s.  10d.,  than  in 
1913.  But,  in  reply  to  this  it  may  be  pointed  out  that  in  the  past 
forty  years  large  new  wheat  areas  have  been  developed  in  different 
parts  of  the  world,  while  the  changes  in  cost  of  production  have 
been  until  recently  in  favour  of  other  countries  as  compared  with 
the  United  Kingdom. 

Again,  the  wheat  grown  in  1894  and  1913  was  probably  produced 
on  the  best  land  and  under  the  most  favourable  conditions,  and  it 


17 

does  not  follow  that  it  could  have  been  produced  at  a  profit  under 
less  favourable  conditions  on  inferior  land.  Nor  does  it  even  follow 
that  all  the  wheat  produced  was  grown  at  a  profit.  The  force  of 
custom  is  strong  where  farming  is  concerned,  and  rotation  schemes, 
together  with  the  need  for  straw,  may  have  made  it  worth  while  to 
grow  wheat  for  low  profits — or  in  some  cases  for  no  profits  at  all. 

It  is,  however,  clear  that  a  considerable  supply  of  wheat  can  be 
grown  at  a  profit  in  the  United  Kingdon  with  very  low  prices  without 
the  aid  of  State  subsidies,  and  of  course  if  prices  remain  considerably 
above  the  1913  price  of  32s.  9d.  a  quarter,  a  larger  supply  of  home- 
grown wheat  could  be  produced  at  a  profit,  provided  that  the  cost  of 
production  is  not  increased  proportionately ;  but  even  then  it  is  by 
no  means  certain  whether  we  could  produce  as  cheaply  as  some  other 
countries.  Australia  is  one  of  the  most  distant  countries  from  which 
we  import  wheat,  and  although  we  only  imported  from  Australia 
some  twenty  per  cent,  of  our  total  imports  of  wheat  from  the  whole 
of  the  Empire,  owing  to  the  high  cost  of  transport  from  Australia, 
a  comparison  between  the  cost  of  Australian  wheat  and  of  wheat  grown 
in  this  country  is  likely  to  be  particularly  favourable  to  the  latter. 
In  1913,  when  we  were  only  producing  about  20  per  cent,  of  our  total 
wheat  supply,  when  the  price  was  32s.  9d.,  the  cost  per  quarter  of 
Australian  wheat  delivered  in  Great  Britain  was  32s.  6d.  The  cost 
of  carriage  accounted  for  more  than  25  per  cent,  of  the  total  cost, 
and  in  addition  the  wheat  was  a  better  quality  than  English  wheat.* 

The  average  price  for  Australian  wheat  for  the  four  years  1910-13 
inclusive  was  36s.  lid.,  which  therefore  allowed  a  fair  margin  of  profit. 
Exact  figures  as  to  the  cost  of  production  of  wheat  in  other  countries 
are  not  available,  but  it  is  probable  that  countries  lying  within  easier 
reach  of  our  ports  than  Australia  are  at  a  still  greater  advantage  with 
regard  to  supplying  us  with  wheat  than  she  is. 

But  what  as  to  the  future  ?  It  may  be  that  the  cost  of  production 
of  wheat  in  other  countries  may  increase,  and  that  the  growth  of  the 
populations  of  other  nations  may  reduce  the  supply  available  for 
export  to  this  country,  so  that  it  may  become,  not  merely  necessary 
but  profitable  for  us  to  produce  more  of  our  food  ourselves.  When 
this  time  arrives,  however,  the  change  would  come  about  naturally. 
The  new  demand  for  home-grown  wheat  would  create  the  supply, 
and  to  adopt  at  the  present  time  artificial  means  to  bring  about  a  state 
of  things  which  would  come  about  in  the  natural  course  of  events, 
would  appear  to  be  a  somewhat  wasteful  proceeding. 

One  other  point  in  this  connection  remains  to  be  mentioned.  If  it 
is  more  profitable  to  buy  a  large  part  of  our  food  than  to  produce  it, 
and  if,  notwithstanding  this,  we  decide  to  produce  instead  of  to  buy, 
we  shall  gradually  have  to  transfer  some  of  our  labour  from  manu- 
factures to  agriculture,  and  new  capital  will  be  diverted  to  agriculture— 

*For  this  information  I  am  indebted  to  the  Institute  for  Research  in  Agricul- 
tural Economics,  University  of  Oxford. 


18 

that  is,  industry  will  be  turned  from  a  more  to  a  less  profitable  channel 
The  result  will  be  a  diminution  in  the  national  income — or  at  least, 
a  less  rapid  increase  than  would  have  taken  place  had  the  change  not 
been  made.  This  at  a  time  when  we  shall  have  an  enormous  debt  to 
pay  off,  when  large  sums  are  needed  for  pensions  for  soldiers'  widows 
and  the  disabled — in  short,  at  a  time  when  the  most  productive  employ- 
ment of  labour  and  capital  will  be  more  than  ever  essential.  There  is 
no  need  to  labour  the  point  further  ;  enough  has  been  said  to  show 
that  a  subsidised  agriculture  will  mean  dearer  food,  and  that  neither 
the  changes  suggested  nor  the  methods  proposed  for  carrying  them 
out  can  be  justified  on  purely  economic  grounds. 

I  now  turn  to  my  second  question — namely,  if  the  change  cannot 
be  justified  on  economic  grounds,  whether  it  is  desirable  to  adopt 
measures  which  are  based  on  non-economic  considerations — i.e., 
whether  it  is  desirable  to  "  sacrifice  opulence  for  defence." 

That  to  be  prepared  for  war  is  the  only  way  to  keep  the  peace  is 
a  doctrine  which,  in  the  minds  of  many  people,  the  present  war  has 
done  much  to  discredit ;  and  there  is  probably  much  truth  in  the 
opposite  view — namely,  that  to  concentrate  attention  continually  on 
the  possibility  of  war  is  one  of  the  surest  ways  of  bringing  it  about. 
But  against  this,  it  may  be  argued  that  where  any  of  the  more  powerful 
nations  are  making  preparations  for  defence  which  can  at  any  moment 
be  used  for  purposes  of  offence,  all  the  others  are  obliged  to  follow 
their  lead  ;  and  it  certainly  seems  improbable  that  any  single  nation 
is  likely  in  the  near  future  to  reach  such  a  high  standard  of  morality 
as  to  abandon  on  pacifist  grounds  all  military  and  naval  defences 
while  living  in  the  midst  of  an  armed  world. 

Assuming,  then,  that  defensive  measures  will  be  regarded  as  indis- 
pensable during  the  coming  years,  the  questions  which  naturally  arise 
are  whether  an  attempt  to  make  ourselves  more  nearly  self-sufficing 
with  regard  to  food  as  a  measure  of  defence  is  necessary,  and  whether 
it  is  not  likely  to  turn  attention  away  from  military,  naval,  and  other 
measures  which  are  more  strictly  regarded  as  defensive. 

To  deal  first  with  the  second  point :  if  we  are  to  spend  millions  a 
year  on  armaments,  surely  these  should  be  adequate  for  national 
safety  without  the  imposition  of  an  additional  burden  of  dearer 
food  as  a  defensive  measure.  Is  it  not  better  that  steps  should  be  taken 
to  make  an  effective  blockade  impossible,  and  that  we  should  know 
how  much  we  are  spending  for  that  purpose,  than  that  we  should, 
by  indirect  means  which  are  supposed  to  have  economic  advantages 
attached  to  them,  attempt  to  make  a  possible  blockade  unavailing  ? 

As  to  how  far  it  is  necessary  to  make  ourselves  more  self-sufficing 
with  regard  to  food  for  the  sake  of  national  security,  much  turns  on 
the  question  as  to  the  weapons  with  which  future  wars  are  likely  to 
be  waged.  If  we  could  be  certain  that  the  greatest  danger  to  which 
we  could  be  subjected  in.  the  next  war  was  from  a  vigorous  submarine 
campaign,  some  steps  in  the  direction  of  making  ourselves  less  dependent 
on  overseas  supplies  would  seem  to  be  desirable.  But  the  submarine 


19 

may  become  obsolete  to-morrow,  and  the  next  war  may  find  us  with 
a  subsidised  agriculture  as  a  protection  against  a  danger  which  we 
should  not  have  to  encounter. 

The  importance  of  regularity  of  supply  is  a  point  which  must  not 
be  overlooked.  Hitherto  we  have  obtained  wheat,  for  instance,  from 
a  large  number  of  countries,  but  a  regular  supply  from  very  few  ;  and 
when  one  source  has  failed  us  it  has  been  all  to  the  good  that,  owing 
to  our  free  market,  we  have  been  able  to  turn  to  another.  One  of  the 
main  reasons  why  our  supply  from  so  many  parts  of  the  world  is  so 
irregular  is  that  in  all  wheat-growing  countries  there  are  occasional 
bad  harvests.  There  is  a  partial  failure  of  our  own  harvests  once  in 
seven  years  on  the  average,  and  if  we  have  ceased  to  draw  any  large 
part  of  our  supplies  from  other  countries,  it  will  not  be  easy  to  do  so 
again  in  an  emergency.  This  of  course,  is  not  an  argument  against 
our  attempting  to  make  ourselves  more  self-sufficing  as  regards  wheat, 
but  it  does  suggest  a  further  difficulty  in  the  way  of  our  being  able  to 
do  so.  If  we  narrow  the  area  of  supply,  the  supply  is  likely  to  be  less 
regular. 

A  plan  which  has  often  been  proposed — namely,  the  storing  of  wheat 
in  national  granaries,  to  be  used  in  an  emergency,  might  in  some  respects 
be  more  satisfactory  than  the  subsidising  of  agriculture,  for  the  stored 
wheat  might  be  used  even  in  normal  times  as  a  means  of  regularising 
the  supply  and  also  of  steadying  prices.  But  many  of  the  objections 
I  have  already  urged  against  a  subsidised  agriculture  apply  with  equal 
force  to  national  granaries. 

The  political  results  of  our  devoting  our  energies  more  to  agriculture 
and  less  to  manufacturing  industries  cannot  be  ignored.  The  countries 
from  which  we  formerly  imported  food  will  have  to  find  new  markets 
for  their  products,  and  this  may  mean  that  commercial  ties  between 
some  other  countries  and  ourselves  will  be  weakened,  while  they  will 
be  strengthened  between  our  competitors.  If  we  buy  less  wheat  from 
Canada,  for  instance,  it  is  possible  that  the  United  States  with  their 
growing  population  may  take  the  Canadian  supply,  while  the  Canadians 
may  take  American  manufactures  in  exchange  instead  of  ours ;  and- 
the  closer  commercial  relations  thus  created  may  evenutally  lead  to  a 
weakening  of  the  political  union  between  Canada  and  this  country. 

Of  course  to  this  it  may  be  replied  that  it  is  not  intended  that  our 
subsidised  agriculture  should  make  us  absolutely  self-sufficing,  and  that 
it  might  be  so  arranged  as  to  make  us  self-sufficing  as  regards  supplies 
from  foreign  countries,  all  the  food  we  require  being  produced  within 
the  Empire.  But  here  again  we  shall  have  to  face  the  possibility  of 
a  failure  of  the  harvest  in  the  Dominions  simultaneously  with  a  failure 
at  home.  It  is  difficult  to  see,  also,  how  this  plan  could  be  carried  out 
without  a  tariff  and  a  complicated  system  of  preference  ;  and  it  is 
still  more  difficult  to  see  how  a  tariff  giving  a  preference  to  imports 
from  the  various  parts  of  the  Empire  could  be  successfully  combined 
with  any  scheme  for  fixing  minimum  wheat  prices  in  this  country. 
The  question  of  preference  is  too  complicated  for  any  adequate 


20 

discussion  here,  but  it  may  be  pointed  out  that  if  imperial  wheat  were 
admitted  free,  or  given  a  preference  as  against  supplies  from  other 
countries,  agriculture  might  develop  so  rapidly  in  the  self-governing 
Dominions  and  India  that  instead  of  importing  four-fifths  of  our 
wheat  from  the  rest  of  the  world,  as  we  did  before  the  war,  we  might 
before  long  find  ourselves  importing  four-fifths  from  the  rest  of  the 
Empire — i.e.,  we  should  still  be  importing  the  bulk  of  our  supply 
from  abroad — in  which  case  our  national  security  would  be  no  more 
assured  than  before.  In  fact,  it  seems  almost  impossible  to  reconcile 
the  policy  of  making  the  different  parts  of  the  Empire  self-sufficing 
with  regard  to  their  food  supply  as  a  measure  of  defence,  with  the 
policy  of  drawing  them  more  closely  together  by  means  of  economic 
ties,  for  the  greater  the  success  obtained  in  making  each  part  secure, 
the  more  disunited  the  Empire  will  become  ;  while  the  more  nearly 
we  approach  to  an  Empire  united  by  economic  ties  the  less  must 
be  the  self-sufficiency  of  each  of  its  parts. 

It  is  by  no  means  the  object  of  this  paper  to  decry  all  attempts 
to  develop  British  agriculture  so  that  it  may  become  a  more  prosperous 
industry.  My  aim  has  been  merely  to  consider  how  far  it  is  necessary 
to  introduce  agricultural  reforms  on  grounds  of  national  safety,  how 
far  the  plan  of  subsidising  agriculture  is  likely  to  succeed  in  that  object, 
and  how  far  it  is  likely  to  be  detrimental  to  the  economic  interests 
of  the  country  as  a  whole.  Are  there  no  alternative  policies  with  regard 
to  our  food  supply  that  could  be  adopted  ?  There  appear  to  be  two, 
and  these  it  should  be  possible  to  combine  :  (1)  The  development  of 
agriculture  by  economic  means,  and  (2)  Emigration. 

There  is  no  doubt  whatever  that  our  agriculture  could  be  made 
far  more  productive  than  it  is  without  resorting  to  any  artificial  methods 
for  its  development.  Mr.  A.  D.  Hall,  an  ardent  advocate  of  a  subsidised 
agriculture,  writes  as  to  this  :  "In  every  district  certain  farms  stand 
out ;  and  if  the  neighbouring  holdings,  with  the  same  class  of  land 
and  the  same  opportunities  were  only  worked  with  equal  intelligence 
and  energy  there  would  be  no  agricultural  problem  to  discuss"-;* 
and  again  :  "  It  is  not  too  much  to  say  that  if  the  farming  throughout 
Great  Britain  reached  the  standard,  not  of  the  best,  but  of  the  good 
farms  existing  in  every  district,  there  would  be  an  increased  production 
of  food  of  from  10  per  cent,  to  15  per  cent,  without  any  addition  to  the 
existing  proportion  of  arable  land."f  Why  is  it,  one  may  well  ask, 
that  farming  throughout  Great  Britain  does  not  reach  the  standard 
of  the  good  farmers  existing  in  every  district  ?  The  reasons  are  to 
be  found  mainly  in  the  fact  that  farming  is  not  as  a  general  rule  seriously 
treated  as  a  business,  in  the  neglect  of  science,  and  in  the  inadequacy 
of  agricultural  education.  It  seems  unlikely  that  agriculture  will 
ever  become  really  prosperous  in  Great  Britain  until  the  farm  is  run 
more  on  the  lines  of  other  businesses — until  industrial  farms  on  a  large 

*Agriculture  after  the  War,  p.  27. 
t  Agriculture  after  the  War,  p.  100. 


21 

scale,  with  up-to-date  machinery,  with  highly-trained  managers,  and 
with  labour  organised  in  strong  trade  unions  and  living  under  decent 
conditions,  have  superseded  small  farms  run  on  obsolete  and  old-fashiond 
lines.* 

Mr.  Middleton's  Report  on  "  The  Recent  Development  of  German 
Agriculture  "  has  attracted  a  good  deal  of  attention  of  late,  but  one  fact 
which  it  reveals — namely,  that  in  1910  the  total  expenditure  on  agri- 
cultural instruction  in  Prussia  was  about  £484,000,  while  the  total 
expenditure  in  England  and  Wales  in  1910-11  was  about  £117.000— 
appears  to  have  been  hardly  noticed.f  A  larger  expenditure  on  agri- 
cultural education  would  probably  be  of  far  more  benefit  to  agriculture 
and  to  the  nation  in  the  long  run  than  any  that  is  likely  to  be  derived 
from  the  manipulation  of  prices. 

Whether  farming  should  become  a  national  industry,  whether 
large-scale  industrial  farms  should  be  owned  and  controlled  by  the 
State  or  municipalities,  or  whether  they  should  be  left  in  private 
hands,  is  a  question  which  it  would  take  too  long  to  discuss  here,  and 
I  must  content  myself  with  merely  stating  the  lines  upon  which,  as 
it  seems  to  me,  reform  should  proceed,  leaving  questions  of  administra- 
tion on  one  side. 

Of  course  the  reforms  which  are  here  suggested  cannot  be  brought 
about  in  a  day,  and  if  a  largely  increased  output  of  agricultural  produce 
is  required  immediately,  other  measures  will  have  to  be  adopted  ; 
but  on  Mr.  Hall's  own  showing,  when  times  once  more  become  normal 
large  agricultural  developments  are  possible  without  the  necessity  of 
making  any  great  demands  upon  the  taxpayer,  or  without  involving 
disturbance  to  other  industries,  or  changes  in  our  commercial  policy. 

I  have  so  far  considered  the  question  from  the  side  of  supply,  but  it 
is  possible  also  to  look  at  it  from  the  side  of  demand.  It  may  turn  out 
to  be  wiser  to  diminish  the  demand  for  home-grown  food  than  to  attempt 
an  increase  in  the  supply  by  non-economic  means  ;  and  emigration 
would  tend  to  bring  about  this  result.  There  are  great  possibilities  of 
agricultural  development  in  the  self-governing  Dominions — far  greater 
than  in  this  country.  But  development  in  the  Dominions  will  be  slow 
unless  the  supply  of  labour  there  can  be  largely  increased.  This 
country  could,  after  the  war,  doubtless  supply  much  of  the  labour  that 
is  needed,  and  it  is  at  any  rate  arguable  that  cheaper  and  better  food 
might  be  grown  for  the  mother  country  by  British  labour  in  the 
Dominions  than  by  British  labour  at  home. 

There  are,  no  doubt,  serious  objections  to  emigration,  and  the  cry 
of  :  "  Surely  there  is  room  on  the  land  in  the  old  country  for  those 
who  are  willing  to  work  "  may  very  naturally  be  raised.  But  it  is 
possible  that  the  development  of  agriculture  at  home  could  go  on 


*For  a  fuller  discussion  of  the  policy  of  industrialised  farming,  see  "  Some 
Problems  of  Urban  and  Rural  Industry"  (published  by  Ruskin  College), 
Paper  entitled  "The  Place  of  Agriculture  in  Industry,"  by  C.  S.  Orwin, 
also  Speech  by  Arthur  W.  Ashby  (p.  89). 

f  The  Recent  Development  of  German  Agriculture"  (T.  H.  Middleton),  j>.  26. 


22 

side  by  side  with  the  development  of  agriculture  in  the  Dominions 
by  means  of  emigration.  There  is  much  to  be  said  in  favour  of  a  larger 
rural  population  in  this  country,  on  social  and  other  grounds  ;  but  it 
will  not  merely  be  wasteful,  but  disastrous,  to  put  men  on  to  the  land 
without  reference  to  the  amount  which  it  is  possible  for  them  to  produce. 
The  output  of  an  acre  of  land  may  be  increased  by  doubling  the  number 
of  men  who  are  working  upon  it,  but  the  chances  are  that  the  output 
will  not  be  doubled,  and  unless  it  is  doubled,  the  output  per  man  will 
have  diminished,  and  those  working  upon  it  prior  to  the  change  will 
be  poorer  than  before. 

An  increase  in  the  number  of  small  holdings  may  be  desirable  apart 
from  economic  considerations,  because  there  are  numbers  of  men 
who  can  live  happy  lives  spent  mainly  in  hard  work  on  small  pieces 
of  land,  obtaining  but  meagre  returns,  and  there  is  no  reason  why 
small  holdings  on  a  considerable  scale  should  not  exist  side  by  side 
with  large  industrial  farms.  But  for  the  young  man  with  energy  and 
enterprise  agriculture  in  Canada  might  offer  both  a  better  life  and 
larger  returns  for  his  labour  than  he  could  hope  for  on  a  small  holding 
at  home. 

Emigration,  it  may  be  said,  means  leaving  friends  and  old  associations, 
and  the  breaking  of  family  ties.  But.  on  the  other  hand,  how  often 
do  the  young  men  and  women  who  leave  their  native  villages  in  rural 
England  for  work  in  our  industrial  towns  return  to  their  homes  ? 
It  really  might  not  make  very  much  difference  in  this  respect  whether 
a  boy  from  Somersetshire  settled  in  a  Lancashire  town  or  on  a  Canadian 
farm  ;  and  with  the  improvements  in  travelling  facilities  which  are 
likely  to  take  place  in  the  near  future,  it  may  become  almost  as  easy 
for  him  to  return  to  his  native  village  from  Canada,  as  it  was,  not  so 
very  long  ago,  for  him  to  take  the  journey  from  the  North  of  England 

I  am  not  in  any  sense  writing  as  an  advocate  of  emigration,  but  it 
seemed  worth  while  to  point  out  that  it  is,  at  any  rate,  a  possible  alter- 
native to  the  policy  of  increasing  our  home-grown  food  with  the  aid 
of  non-economic  devices. 

If  the  nation  should  decide  against  emigration  and  in  favour  of 
encouraging  young  men  and  women  to  remain  in  the  mother-country, 
the  question  arises  as  to  whether  it  is  necessary  or  desirable  that  more 
than  threequarters  of  the  population  of  England  and  Wales  should 
live  in  towns  and  less  than  a  quarter  in  the  country.*  I  have  already 
shown  that  to  draw  more  men  into  agriculture  than  the  industry 
requires  would  be  disastrous  ;  but  while  we  may  not  want  more  men 
on  the  land,  we  certainly  want  more  people  in  the  country  ;  and  a 
distinction  should  be  drawn  between  the  cry  of  "  Back  to  the  land  " 
and  the  cry  of  "  Back  to  the  country."  The  opinion  appears  to  be 
widely  held  that  agriculture  is  practically  the  only  industry  which  can 
successfully  be  carried  on  in  the  country.  But  is  this  so  ?  Why  should 

*  Urban  population  :  78.1  per  cent.  ;  Rural  population  :  21.9  per  cent.    (Census 
for  England  and  Wales,  1911). 


23 

we  not  spread  out  our  industries  instead  of  keeping  them,  and  the  people 
whom  they  employ,  cooped  up  in  unlovely  towns  ?  Could  not  buttons 
and  bedsteads  be  made  just  as  well  in  the  Warwickshire  villages  as  in 
Birmingham  ?  Is  it  essential  that  boots  should  be  manufactured  in 
Northampton  and  in  the  East  End  of  London  ?  Could  not  a  great 
deal  of  our  clothing  be  produced  in  the  country  districts  ? — and  could 
not  agricultural  machinery  be  made  in  the  midst  of  the  industry 
where  it  is  used  ? — to  take  a  few  examples.  In  fact  there  are  probably 
very  few  industries  which  it  would  be  impossible  to  carry  on  quite 
successfully  in  the  country. 

'  There  are  two  obvious  difficulties — coal  and  transport.  But  the  one 
could  be  overcome  by  a  more  extended  use  of  electricity — by  means 
of  large  electric  power  stations,  placed  as  far  as  practicable  in  the 
neighbourhood  of  the  coal  mines,*  and  the  other  by  light  railways 
and  motor  services  and  improved  organisation  of  our  railway  system. 

The  development  of  agriculture  on  the  lines  I  have  already  suggested 
will  of  itself  not  be  sufficient  to  keep  young  men  and  women  of  enterprise 
from  seeking  work  in  the  towns,  and  the  only  way  to  prevent  this, 
as  it  seems  to  me,  is  to  bring  into  the  country  some  of  what  is  best 
in  town  life — some  of  the  amusements,  the  larger  choice  of  occupations, 
the  opportunities  of  self-development  and  social  intercourse,  which  are 
in  a  great  measure  denied  to  country  dwellers.  An  industrial  population 
working  side  by  side  with  those  who  work  on  the  land  would  both 
confer  and  receive  benefits.  The  monotony  of  the  life  of  the  agricultural 
labourers  would  be  relieved,  while  those  engaged  in  manufacture 
would  gain  in  health  and  physique.  Agriculture  itself  would  also 
gain,  for  many  of  the  industrial  population  would  turn  to  agriculture 
as  an  interest  in  their  leisure  hours.  The  English  people  are,  after  all, 
an  out-of-door  race,  lovers  of  country  sports  and  of  the  country.  The 
most  inveterate  townsmen  love  flowers,  and  do  their  best  to  obtain 
even  the  smallest  strip  of  garden. 

But  I  am  certain  to  be  told  that  my  scheme  will  entirely  destroy 
the  beauty  of  the  country  and  the  charm  of  country  life.  No  such 
thing,  however,  need  be  the  result  of  the  changes  I  have  in  mind  ;  for, 
as  Mr.  Hartley  Withers  has  said  :  "  We  might  imagine  England  one 
vast  Garden  City,  dotted  over  with  factories,  each  of  which  might  be 
as  beautiful  as  a  cathedral,  embowered  and  surrounded  by  fruit  trees 
and  gardens,  in  which  a  highly  educated  and  technically  trained 
population  would  work  for  five  or  six  hours  a  day,  and  spend  the  rest 
of  their  time  in  intellectual  leisure  and  healthy  exercise  and  home 
life  under  ideally  happy  conditions. "f  This  is,  of  course,  an  idealistic 
picture,  but  it  is  surely  well  to  have  an  ideal  before  us. 


*For  the  possibilities  of  the  application  of  electricity  to  industry,  see  "  The 
Nation's  Wealth,"  by  L.  G.  Chiozza  Money,  Chap.  XII. 

]"The  Unity  of  Western  Civilisation,"  edited  by  F.  S.  Marvin,  p.  219. 


24 

I  have  wandered  far  from  the  subject  of  national  defence  and  a 
subsidised  agriculture  ;  but  to  many  of  those  who  advocate  a  subsidised 
agriculture  as  a  means  of  defence  the  idea  is  attractive  because  they 
think  it  will  be  possible  to  combine  with  it  the  bringing  back  of  the 
people  to  the  land.  My  object  has  been  to  show  that  there  is  another 
way  in  which  this  can  be  brought  about.  The  immediate  question 
which  we  have  to  discuss,  however,  is  whether  we  wish  to  subsidise 
agriculture  for  the  sake  of  national  security  in  the  future.  If,  when 
peace  comes,  we  find  that  the  world  is  in  such  a  state  as  to  make  it 
appear  that  future  wars  are  inevitable,  then  we  shall  decide  to  adopt 
a  "nationalist"  policy,  but  we  must  be  prepared  to  pay  the  price 
with  little  certainty  that  we  shall  gain  the  security  for  which  we  have 
paid.  If,  however,  we  find  that  the  nations  are  drawing  together 
in  the  interests  of  the  peace  of  the  world,  and  that  the  world  is  likely 
to  become  a  place  in  which  democracies  can  live  together  and  work  in 
harmony  for  the  welfare  of  mankind,  then  we  shall  develop  our  agri- 
culture without  reference  to  the  possibilities  of  future  wars,  and  shape 
our  commercial  policy  in  such  a  way,  that  it  may  help  to  bring  about 
the  most  advantageous  division  of  labour  amongst  the  nations,  with 
the  freest  possible  exchange  of  goods  and  services  between  their  peoples. 


In  speaking  on  his  paper,  Mr.  Sanderson  Furniss-  said  that  the 
conference  would  naturally  involve  a  good  deal  of  discussion  on  com- 
mercial policy,  for  commercial  policy  was  the  point  around  which 
international  relations  and  economics  might  be  said  to  meet,  and  he 
had  thought  it  worth  while  to  restate  once  again  the  principles  upon 
which  our  commercial  policy  before  the  war  was  believed  to  be  based, 
and  some  conflicting  theories  of  foreign  trade,  namely,  the  theory  of 
Free  Trade  and  the  theory  of  Protection.  He  intended  the  first  seven 
pages  of  his  paper  to  be  as  much  an  introduction  to  the  conference 
as  an  introduction  to  the  paper  itself. 

While  political  and  ethical  arguments,  which  must  be  considered, 
would  be  brought  forward  in  support  of  a  change  of  policy,  it  was 
important  to  keep  the  economic  point  of  view  well  in  the  foreground. 
The  fiscal  controversy  was  not  dead,  though  it  might  have  moved  on 
to  a  somewhat  different  plane.  There  were  still  people  who  approached 
the  question  from  two  entirely  different  standpoints,  from  what  he 
had  called  in  the  paper  the  national  and  the  international  points  of  view. 
The  objects  aimed  at  might  have  something  in  •  common,  but  the 
method  of  approach  was  different. 

The  main  argument  of  the  paper  was  suggested  by  the  question  as  to 
whether  it  was  desirable  to  subsidise  agriculture  so  that  it  might  be 
developed  as  a  means  of  defence  in  a  national  crisis,  or  whether  we  should 
continue  to  trust  to  being  able  to  keep  the  seas  open  by  ordinary  methods 
of  defence.  The  question  was  not  merely  one  of  national  expenditure- 
many  other  factors  had  to  be  taken  into  consideration.  The  speaker 
then  summarised  the  main  points  of  his  paper,  and  suggested  several 


25 

questions  for  discussion.  He  wished  to  make  it  quite  clear  that  he 
distinguished  carefully  between  changes  which  were  proposed  for  the 
purposes  of  the  war,  and  changes  which  were  intended,  in  some  quarters, 
to  become  part  of  the  industrial  policy  of  the  nation. 

In  expanding  one  or  two  points,  he  asked  whether  we  were  quite 
certain  that  the  fixing  of  minimum  prices  for  wheat  and  oats,  as  had 
been  done  in  the  Corn  Production  Act,  was  really  the  best  way  of 
getting  the  extra  supply  of  food  that  we  required.  Might  not  fixed 
prices  remove  a  stimulus  to  production  and  perpetuate  old-fashioned 
and  obsolete  methods  ?  This  was  an  important  matter,  and  especially 
in  connection  with  farming. 

Again,  was  it  quite  certain  that  to  make  ourselves  self-sufficing 
with  regard  to  food  would  really  be  a  guarantee  of  winning  wars  in 
the  future  ?  Was  it  not  the  case  that  what  success  we  had  had  in  this 
war  had  been  mainly  due  to  our  surplus  wealth — for  the  most  part 
the  product  of  our  manufacturing  industries  ?  The  countries  which 
had  shown  the  greatest  staying  power  during  the  war  were  those 
whose  manufactures  were  highly  developed,  and  not  agricultural 
countries.  He  would  be  told  that  Germany  had  developed  both 
manufactures  and  agriculture,  and  this  was,  to  some  extent,  true. 
But  Germany  had  only  done  so  by  placing  a  great  strain  upon  her  people, 
and  surely  after  the  war  we  should  not  wish  to  emulate  Germany  in 
her  military  preparations. 

With  regard  to  the  suggestions  at  the  end  of  the  paper,  they  were  not, 
strictly  speaking,  alternatives  to  the  development  of  agriculture  as  a 
means  of  defence,  but  he  believed  that  it  was  possible  to  realise  many 
of  the  objects  of  those  who  were  in  favour  of  a  subsidised  agriculture, 
by  other  and  less  objectionable  methods. 

If  a  future  war  was  regarded  as  inevitable,  we  should  probably  be 
driven  into  some  policy  which  was  not  economically  the  most  advan- 
tageous. In  that  case,  let  us  know  what  we  were  about.  The  answers  to 
all  these  questions  depended  on  our  faith  in  the  future,  and  on  the  kind 
of  place  we  intended  the  world  to  be  when  this  struggle  was  over. 


QUESTIONS. 

Question  :  Would  it  not  be  more  correct  to  say  that  the  Navy  is 
maintained  not  so  much  for  the  protection  of  transport  and  national 
trade  but  for  the  protection  of  the  country  as  such  ? 

Answer  :  I  suppose  it  is  intended  for  both.  But  when  we  talk  of 
increasing  our  Navy  we  lay  stress  on  the  importance  of  protecting 
our  trade. 

Question  :  With  regard  to  emigration,  which  the  speaker  advocated, 
would  the  lecturer  consider  it  economically  good  ?  The  reason  for 
emigration  of  the  agriculturalist  in  the  past  was  wages  and  depression 


26 

in  their  class  of  occupation.  He  argues  that  people  should  be  taken 
back  to  the  country.  How  would  he  do  that  while  the  magnet  of  the 
bigger  shilling  exists  in  the  towns  ?  It  is  this  that  draws  them  away. 

Answer  :  I  only  suggest  emigration  as  an  alternative.  If  you  think 
it  best  not  to  bother  about  increasing  the  supply  of  food  here,  you 
could  get  over  the  difficulties  by  diminishing  the  demand  for  it  by 
having  fewer  mouths  to  feed,  i.e.,  by  sending  some  of  your  people  to 
grow  corn  in  the  colonies.  There  is  a  great  deal  to  be  said  for  emigration 
from  some  points  of  view.  The  agriculturalist  has  a  better  chance 
of  making  a  livelihood  in  the  Colonies,  and,  as  a  rule,  a  better  life  before 
him.  As  to  bringing  men  back  into  the  country,  I  am  not  sure  that 
the  speaker  has  quite  understood  my  point.  I  want  to  distinguish 
between  bringing  them  back  to  the  land  and  back  to  the  country. 
There  are  many  industries  besides  agriculture  that  could  be  quite 
well  run  in  the  country,  and  it  would  be  a  good  thing  for  the  townsmen 
to  work  in  the  country  and  certainly  a  good  thing  for  the  country 
people.  It  is  quite  hopeless  to  try  to  bring  people  out  of  the  towns 
to  work  at  agriculture  under  present  conditions. 

Question :  Would  it  not  be  better  for  the  happiness  and  well-being 
of  the  country  if  more  people  were  brought  on  to  the  land  rather 
than  into  manufacturing  industry  ? 

Answer  :  I  am  not  at  all  sure  about  that.  It  depends  largely  on 
what  they  can  get  out  of  the  land.  It  is  no  good  putting  too  many 
men  on  the  land  if  they  cannot  produce  enough  to  keep  themselves  ; 
or  too  many  people  to  provide  the  food  you  want.  In  the  same  way, 
you  may  have  too  many  people  in  a  factory.  I  think  it  would  be 
a  good  thing  for  other  industries  to  be  introduced  into  the  country  : 
it  would  add  a  good  deal  to  the  happiness  of  the  life  both  of  the  towns- 
man and  the  country  people  they  find  there. 

Question  :  The  lecturer  seems  to  suggest  that  there  are  too  many 
people  on  the  land.  I  think  there  are  not  sufficient.  If  there  were 
more  houses  built,  people  would  come  back  to  the  land.-  If  that 
could  be  done,  cultivation  would  be  greatly  intensified.  Belgium  can 
produce  close  upon  twice  as  much  per  acre  than  in  this  country,  because 
people  are  on  the  land  to  cultivate  it.  Could  we  not  intensify  our 
cultivation  much  more  in  this  country  if  at  least  double  the  number 
of  men  were  on  the  land  ? 

Answer  :  We  might  do  with  more  people  on  the  land,  but  I  do  not 
think  we  should  do  good  by  doubling  the  number.  You  have  to  look 
at  the  output  per  man,  rather  than  the  output  per  acre.  You  may 
double  the  people,  but  unless  you  can  at  the  same  time  double  the 
output  per  man,  the  people  are  poorer.  That  is  one  of  the  difficulties 
you  are  up  against.  You  cannot  increase  the  number  of  people  on 
the  land  indefinitely.  I  should  think  if  you  developed  agriculture 
on  the  lines  I  suggest,  you  might  increase  the  number  of  men  to  some 


27 

extent;  but,  on  the  other  hand,  it  is  possible  that  if  you  get  more 
up-to-date  machinery  and  more  scientific  farming,  you  would  get  a 
considerable  increase  of  food  without  much  increase  of  men  on  the  land. 
I  have  no  objection  to  more  people  if  they  are  needed. 

Question  :  Would  it  not  be  better  for  the  Government  to  give  us 
better  facilities  for  having  small  holdings,  where  men  when  they  are 
getting  on  in  years  could  maintain  themselves  and  help  to  maintain 
the  people  at  large  ? 

Answer  :  Small  holdings  for  townsmen  would  be  a  very  good  thing  ; 
and  if  you  can  get  the  townspeople  to  go  into  the  country,  you  could 
develop  the  small  holding  policy  as  supplementary  to  industrial  farming  ; 
but  I  am  not  at  all  certain  that  the  small  holding  policy  as  it  is  being 
run  at  present  is  going  to  be  a  very  great  success.  Small  holdings, 
as  they  are  at  present,  generally  mean  very  hard  work  for  a  man  and, 
probably  for  his  wife  and  children  too,  for  very  small  results.  There 
should  be  small  holdings  for  the  people  who  like  that  sort  of  life,  and 
also  for  special  things  like  fruit  and  vegetables.  I  do  not  think  you  will 
ever  get  agriculture  developed  successfully  over  all  the  country  on  the 
small  holding  plan. 

Question  :  If  small  holdings  were  developed  you  would  require 
buildings  for  the  people  to  live  in.  The  Government  do  nothing  in 
that  direction  in  the  rural  districts.  The  reason  given  is  that  it  does 
not  pay.  If  we  had  more  men  on  the  land,  what  would  that  add  to 
the  cost  of  production  ? 

Answer  :  If  you  have  more  people  on  the  land,  you  will  want  more 
houses,  and  this  would  mean  increase  in  cost  of  production  of  food. 
I  think  that  would  be  quite  justified  if  you  found  you  wanted  more 
people  for  agriculture.  The  same  thing  applies  to  towns  :  if  you  want 
more  people,  you  have  to  enlarge  the  town.  I  do  not  think  that  would 
be  a  reason  for  not  doing  it  if  it  was  desired  to  develop  agriculture 
in  that  way. 

Question  :  Does  the  lecturer  believe  it  is  economically  sound  to 
establish  factories  in  the  country  ?  Is  not  centralisation  far  better 
than  decentralisation,  seeing  that  one  industry  is  so  dependent  upon 
another  ? 

Answer  :  I  think  it  economically  sound  if  we  increase  the  well-being 
of  the  population.  (I  do  not  want  to  narrow  economics  down  to  pure 
material  well-being.)  Improved  transport  and  light  railways,  motor 
services,  and  extended  railway  services  would  do  away  with  the  diffi- 
culty of  decentralisation — run  your  factories  by  electricity  instead  of 
coal.  I  think  this  could  be  done  ;  and,  if  it  would  result  in  a  healthier 
and  happier  population,  I  think  it  would  be  justified  ;  and  if  you  could 
get  rid  of  some  of  the  squalor  of  the  slums  of  the  industrial  towns  in 
that  way,  it  would  be  fully  justified. 


28 

Question  :  If  the  land  were  owned  by  the  State,  would  not  these 
difficulties  disappear  altogether  ? 

Answer  :  I  am  not  at  all  sure  about  that.  I  should  like  to  see  the 
land  owned  by  the  State,  but  I  am  not  sanguine  about  all  the  difficulties. 

Question  :  Could  we  not  increase  our  food  supply,  especially  of 
necessary  articles,  to  be  almost  self-sufficing,  and  at  the  same  time 
increase  our  other  industries  ? 

Answer  :  I  think  you  can  do  both.  As  I  said  in  the  paper,  you  can 
largely  increase  agriculture  by  developing  along  economic  lines.  If 
you  go  beyond  that,  if  you  try  to  go  as  far  as  to  make  yourself  self- 
sufficing  in  a  national  crisis,  as  has  been  suggested  by  people  like 
A.  D.  Hall,  I  think  you  will  only  do  it  by  sacrificing  some  of.  your 
manufactures. 

Question  :  The  lecturer  said  subsidised  agriculture  means  dearer 
food.  What  does  he  mean  by  that  ?  Does  he  mean  that  the  cost 
to  the  consumer  will  be  greater  or  that  the  cost  of  production  is  greater, 
as  it  may  be  that  the  prices  of  agricultural  products  is  not  necessarily 
affected  by  the  subsidy  ;  the  price  would  be  fixed  by  the  international 
markets  of  the  world  ? 

•  Answer  :  By  dearer  food  I  mean  that  if  we  are  going  to  try  to  make 
ourselves  self-sufficing  as  regards  food,  or  more  or  less  so,  and  going 
to  shut  off  supplies  from  abroad  or  from  cheaper  sources,  and  produce 
it  from  a  dearer  source,  you  are  going  to  produce  it  at  a  greater  cost 
than  you  can  buy  it,  which  really  means  dearer  food.  You  would 
probably  get  also  higher  pj ices  because  you  would  stop  foreign  supplies. 

Question  :  Would  the  extra  cost  of  the  subsidy  affect  the  price  to 
the  consumer  ? 

Answer  :  It  would  not  directly  affect  the  price,  but  the  consumer 
would  pay  it  through  taxation. 


DISCUSSION. 

MR.  A.  E.  MABBS  (Coventry  Trades  Council)  : — 

It  seems  to  me  we  have  to  look  at  this  question  from  one  or  two 
points  of  view.  First  we  have  to  consider  whether  it  is  necessary  to 
provide  a  greater  food  supply  sufficient  to  be  able  to  rely  upon  it 
more  or  less  in  time  of  war.  We  do  not  get  over  the  difficulty  by  merely 
saying  that  possibly  the  submarine  may  not  be  so  effective  in  the  next 
war,  and  possibly  our  crops  may  be  burnt  from  above.  That  may  be 
the  case  ;  but,  on  the  other  hand,  the  submarine  may  be  more  effective, 


29 

so  much  so  that  we  may  be  cut  off.  In  that  case  you  would  have  to 
rely  upon  the  supply  of  food  in  this  country,  or  else  give  in  altogether. 
That  seems  obvious  ;  and  as  no  one  can  say  definitely  what  may  happen, 
it  is  the  absolute  duty  of  the  people  to  provide  in  some  way  for  a  supply 
of  food  stuff  in  time  of  war.  It  is  absolutely  necessary  for  the  safety 
of  the  country  to  take  measures  in  this  respect.  The  policy  which  has 
been  suggested  is  that  of  subsidising  agriculture  ;  but  is  this  the 
proper  policy  ?  To  my  mind  subsidies  are  always  bad,  and  you  could 
not  give  subsidies  to  worse  people  than  the  farmers,  because  you  have 
no  guarantee  that  production  will  be  increased,  and  that  is  the  aim  in 
view.  I  am  inclined  to  think  that  the  greater  ease  with  which  the 
farmer  can  get  his  money,  the  less  likely  he  would  be  to  produce  more  ; 
and  it  seems  to  me  that  the  best  method  would  have  been  not  to 
subsidise  the  farming  industry,  but  to  have  started  experimental 
State  farms,  which  might  be  temporarily  subsidised  by  the  Government, 
or — far  better — provided  with  all  the  capital  necessary  to  work  the  ground 
so  as  to  get  the  very  best  results.  I  am  absolutely  convinced  that  the 
question  of  small  holdings  is  as  dead  as  it  can  be.  What  we  want  is  the 
application  of  brains,  science,  and  education  to  the  land  of  this  country, 
and  then  I  believe  it  will  be  possible  to  produce  an  enormously  greater 
amount  of  food  than  we  do  at  the  present  time.  Quite  apart  from  the 
question  of  increasing  food  with  a  view  to  a  future  war,  I  am  inclined  to 
think  that  the  question  would  have  arisen  in  course  of  time.  It  is  very 
nice  to  say  that  you  are  getting  your  food  supplies  from  other  countries, 
but,  after  all,  the  time  must  come,  some  time  or  other,  when  the  popula- 
tion of  those  countries  will  need  larger  and  larger  proportions  of  the 
food  grown  in  their  own  countries  for  their  own  consumption.  The  United 
States  used  to  be  very  much  larger  exporters  of  corn  than  they  are  now, 
and  it  is  estimated  that  in  a  very  short  time  the  United  States  will  be 
importers,  and  not  exporters,  due  largely  to  the  increasing  population. 
This  is  partly  due  to  the  drawing  off  of  the  population  from  agriculture 
into  other  industries,  which  have  been  so  successfully  run  by  the  United 
States  ;  and  what  is  true  of  America  will  also  be  true  of  the  Colonies. 
Although  you  can  say  there  are  other  portions  of  the  world  where 
enormous  amounts  of  wheat  could  be  grown,  such  as  Russia,  we  shall 
find  that  development  goes  on  in  the  various  countries  of  the  world 
not  merely  in  agriculture,  but  that,  side  by  side  with  this,  manufacturing 
industries  are  being  continually  introduced.  In  the  Colonies,  as  well 
as  at  home,  the  glitter  of  the  town,  quite  apart  from  increased  re- 
muneration, seems  to  be  an  exceedingly  powerful  factor  in  determining 
whether  men  shall  live  in  the  town  or  in  the  country,  and  it  seems  to 
me  that  probably  this  problem  will  have  to  be  faced  by  every  country 
in  the  world.  The  only  way  in  which  you  can  get  over  the  glitter  of 
the  town  is  to  nationalise  the  land,  although  you  have  difficulties  there. 
You  have  to  have  the  land  owned  by  the  State  and  controlled  by  some 
authority  which  shall  be  responsible  to  the  Government.  Then  you 
will  be  able  to  get,  as  Mr.  Orwin  pointed  out  at  Bradford,  a 
more  skilled  man  even  than  you  have  on  the  land  at  the  present 


30 

time.  By  means  of  light  railways,  etc.,  instead  of  a  few  isolated 
houses  here  and  there  without  any  chance  of  association,  the  people 
could  live  in  areas  of  considerable  size,  big  enough  at  any  rate  to  bring 
some  of  the  attractions  of  life  to  which  we  are  so  accustomed  in  the 
city  to  these  places,  and  thus  the  attraction  of  town  life  would  be 
diminished.  Those  are  the  lines  on  which  we  must  work. 

As  regards  small  holdings,  most  of  us  when  we  have  to  give  up 
our  avocations  in  which  we  are  employed  would  make  very  bad  small- 
holders, because  they  have  to  work  very,  very  hard.  What  we  do 
want  is  a  greater  production  of  the  necessities  of  life ;  and  it  does 
not  matter  to  us  where  these  come  from.  The  great  problem  is  the 
greater  production  of  wealth — to  produce  more — so  long  as  the  dis- 
tribution is  equitable.  In  this  question  of  the  supply  of  food  it  is 
necessary  to  get  more  people  on  to  the  land,  and  also  from  the  point 
of  view  of  national  well-being  and  health  it  is  absolutely  imperative 
to  get  more  people  on  the  land.  A  few  years  ago  it  was  stated  that  you 
could  never  get  a  fourth  generation  of  Cockney,  as  they  had  died  out 
by  that  time.  We  have  been  using  up  the  life  of  the  people  to  become 
the  workshop  of  the  world.  The  lecturer's  idea  seems  to  be  that  we 
ought  to  be  the  workshop  of  the  world,  but  he  wants  the  conditions 
bettered  :  he  wants  the  workshop  to  have  a  back  garden.  I  don't 
believe  that  you  will  simply  revive  the  health  and  vitality  of  the  people 
by  taking  them  back  into  the  country  and  having  manufactures  there. 
I  believe  that  there  is  something  in  the  land  itself  that  gives  a  greater 
vitality  to  the  people  that  work  on  it,  and  therefore  from  the  point 
of  view  of  health  this  is  absolutely  necessary. 

If  you  go  into  the  manufacturing  districts  to-day  you  find  that  the 
average  height  is  now  5  feet  2,  or  5  feet  3,  due  entirely  to  the  concentra- 
tion of  town  life  and  to  the  unhealthy  conditions  under  which  people 
live.  You  then  go  to  Suffolk  and  the  south-west  of  England,  and  you 
see  the  kind  of  men  who  used  to  be  in  Lancashire — 5  feet  9  or  10 — and 
it  is  nothing  unusual  to  see  men  of  six  feet.  With  reference  to 
emigration  :  emigration  is  very  nice  for  those  who  like  it,  and  I  want 
to  see  a  condition  of  affairs  so  that  anyone  who  does  not  like  it  need 
not  emigrate,  and  because  of  that  I  want  to  give  the  people  in  this 
country  the  opportunity  of  becoming  agriculturalists  in  this  country. 
If  they  prefer  to  go  elsewhere,  I  have  no  objection ;  but  emigration 
should  be  voluntary  emigration,  and  I  want  to  say  that  the  great 
majority  of  those  who  have  gone  abroad  from  this  country  in  the  past 
have  not  gone  voluntarily,  but  because  economic  circumstances  have 
practically  forced  them  out  of  the  country,  and  that  is  not  the  sort 
of  emigration  we  want,  because,  as  far  as  possible,  it  is  always  desirable 
that  people  should  be  able  to  do  that  which  they  desire  in  order  that 
they  may  have  a  chance  of  being  happy.  I  do  not  welcome  the  idea 
of  emigration,  because  as  a  general  rule  those  people  who  emigrate 
are  the  people  with  the  greatest  amount  of  kick,  and  these  are  the 
people  I  want  in  the  country — the  people  who  brace  up  the  working- 


31 

class  to  have  some  greater  desires  and  conceptions  of  what  life  might  be. 
The  proof  that  the  best  have  gone  out  of  the  country  is  the  fact  that 
when  they  come  back  they  are  not  treated  the  same.  They  do  not 
treat  a  Colonial  soldier  the  same  way  as  they  do  the  English  "  Tommy." 
In  the  train  to-day  there  were  some  Colonials,  who  stated  that  it  was 
disgraceful  that  the  Colonial  should  be  treated  better  than  the"  Tommy." 
They  are  better  treated  because  they  have  the  kick — they  are  not 
content  to  put  up  with  the  conditions  of  life  of  our  people.  They  have 
better  conditions,  and  the  authorities  recognise  that  they  have  to  make 
better  conditions  for  the  Colonial  than  for  the  English  soldier,  although 
the  greater  proportion  are  Englishmen. 

Mr.  Furniss  finished  up  by  saying  that  after  all  .the  question  we 
have  to  consider  is  what  sort  of  a  world  we  want :  this  is  a  very  good 
thing  to  consider,  and  I  hope  we  shall  always  consider  it.  But,  side  by 
side  with  the  world  you  want,  you  have  to  put  a  worse  world  which 
you  may  get  by  neglecting  the  possibilities  of  making  this  one  better. 
We  as  individuals  desire  that  there  should  be  peace,  and  that  every- 
thing should  be  produced  in  those  countries  where  it  is  best  to  produce 
it.  This  is  an  ideal  which  I  believe  we  are  working  towards,  but  at  the 
same  time  we  have  to  realise  that  there  are  other  things  to  be  thought  of, 
the  possibility  of  the  democratic  countries  of  the  world  going  under  and 
being  overcome  by  the  autocratic  spirit  of  those  who  desire  the  sup- 
pression of  all  democracy,  both  here  and  abroad.  We  have  to  remember 
the  dangers  of  the  starvation  of  this  country  and  I  believe,  for  the 
reasons  I  have  explained,  that  it  is  absolutely  necessary  to  produce 
in  this  country  a  far  greater  quantity  of  food  than  we  have  produced 
in  the  past.  I  believe  also  that  a  larger  agricultural  population  is 
desirable  for  the  sake  of  the  health  of  the  nation. 


GENEKAL   DISCUSSION. 

MR.  GEORGE  WILSON  (Huddersfield  Industrial  Society,  Education 
Committee)  :  No  one  could  have  read  this  paper  without  being  con- 
vinced that  we  shall  have  to  have  some  different  arrangement  in  our 
fiscal  system ;  but  I  believe  in  the  co-operative  movement,  which  is 
a  protection  against  profiteers.  It  has  always  been  thought  that  a 
policy  which  is  good  for  the  individual  is  good  for  the  nation,  but  that 
has  been  proved  to  be  quite  false  and  unsatisfactory.  I  also  believe 
that  in  the  interests  of  national  health  our  agriculture  should  be  more 
fully  developed  than  it  has  been  in  the  past.  There  are  quite  a 
number  of  questions,  but  they  can  be  resolved  into  one  :  What  sort 
of  a  nation  do  we  want  ?  We  want  better  conditions  than  we  have 
ever  had  before,  a  more  virile  nation,  more  healthy  men,  women,  and 
children — and  one  way  of  getting  these  is  to  develop  agriculture  more 
scientifically. 


32 

MR.  STRAKER  (Northumberland  Miners)  :  1,  too,  want  more  food 
produced  in  this  country,  not  as  a  protection  against  war,  but  as  a 
provision  for  the  people  during  peace.  On  page  12,  Mr.  Furniss  refers 
to  tariffs  as  a  means  of  defence,  and  calls  attention  to  a  remarkable 
fact,  that  t;  in  spite  of  the  machinery  that  has  been  devised  for 

facilitating   foreign   trade the   nations   have   vied   with   one 

another  in  erecting  barriers  in  the  form  of  tariffs."  The  explanation  for 
it  (he  says)  is  to  be  found  mainly  in  the  pursuit  of  national  interests. 
I  do  not  agree  that  that  is  the  explanation.  I  believe  the  explanation 
is  not  that  tariffs  have  been  in  the  interests  of  nations,  but  rather  in 
the  interests  of  persons.  I  think  when  we  look  at  the  profiteering 
that  is  going  on  during  the  present  crisis,  I  am  justified  in  saying 
that  these  men  have  set  their  personal  interests  above  the  interests 
of  the  nation,  and  at  the  present  time  it  is  possible  they  are 
exploiting  our  feelings  against  Germany  for  the  purpose  of  getting 
tariff  reform  established  in  this  country  in  their  own  interest,  and  not 
in  the  interest  of  the  nation.  However,  it  is  proposed  that  a  fiscal 
arrangement  with  our  Allies  shall  be  established,  and  at  the  same  time 
a  tariff  established  for  the  purpose  of  increasing  production  at  home, 
against  a  possible  blockade  of  this  country.  If  we  have  a  fiscal  arrange- 
ment based  on  friendship  with  our  present  Allies,  we  need  not  think 
of  a  possible  blockade  of  this  island  ;  but  if  we  fear  a  blockade,  then 
it  is  because  we  are  afraid  of  our  Allies.  Is  it  ever  likely  that  we  shall 
fcave  such  a  combination  of  nations  against  us  as  would  make  a 
blockade  of  this  country  at  all  possible  ?  If  a  blockade  were  to  take 
place,  we  could  not  possibly  be  self-supporting  for  any  great  length 
of  time.  The  only  wise  policy,  therefore,  is  in  that  League  of  Nations 
which  there  is  so  much  talk  about.  But  to  get  a  League  of  Nations 
it  is  necessary  that  the  peoples  should  be  united  in  International 
Trade  Unions. 

A  DELEGATE  :  If  we  agree  that  the  real  necessity  of  the  times  is 
the  cultivation  of  a  greater  food  supply,  we  ought  to  recognise  that 
this  cultivation  is  being  left  in  the  hands  of  private  enterprise, 
If  the  food  supply  of  the  country  is  of  such  vital  interest,  we 
should  have  the  land  under  State  ownership  and  State  control. 
For  many  years  past  we  have  had  in  this  country  State  experi- 
mental farms.  I  think  that  the  time  of  experiment  is  over,  and 
we  ought  at  once  to  get  the  best  men  on  to  the  land.  What  we 
want  is  specialisation  of  production,  and  we  can  only  get  that  when 
we  get  the  land  under  State  ownership  and  the  men  trained.  This  is 
the  real  question. 

MR.  JESSE  ARGYLE  (Club  and  Institute  Union)  :  I  confess  that  I 
am  not  one  who  believes  that  this  terrible  war  is  going  to  be  the 
last :  war  begets  war,  and  man  is  a  fighting  animal.  I  think  that 
we  in  this  country  would  be  very  foolish  indeed  if  we  did  not  take 
advantage  of  the  lesson  of  the  present  war  to  be  prepared  for 


33 

another.  Any  hope  now  of  universal  free  trade  that  we  used 
to  talk  about  is  a  mere  idle  dream.  The  bitterness  between 
nations  will  be  too  great  for  many  years  to  come  to  allow 
of  that.  There  will  possibly  be  free  trade  with  the  Allies,  but  there 
again  there  are  grave  difficulties.  To  come  to  our  own  Empire,  there 
is  a  great  likelihood  that  we  shall  get,  if  not  absolute  free  trade,  some- 
thing very  closely  approaching  to  it ;  and  when  you  get  to  that  position 
it  will  be  found,  as  in  the  past,  that  our  Colonies  are  in  a  much  better 
position  to  supply  us  with  the  great  bulk  of  our  food  than  we  are  to 
grow  it  ourselves,  and  it  will  be  found  in  the  best  interests  of  all  that 
they  should  continue  to  supply  us  with  the  bulk  of  our  food  while  we 
supply  them  with  manufactured  goods.  How  then  are  we  to  bring  this 
about,  and  yet  also  have  security  for  our  food  supply  in  a  future  war, 
because  it  has  got  to  come  over  the  seas  ?  The  lecturer  thinks  that 
something  may  be  done  which  will  get  rid  of  the  menace  of  the  sub- 
marine. It  seems  to  me  equally  probable  that  the  menace  may  be 
even  greater  than  it  is,  and  so  we  have  to  find  some  means  by  which  we 
shall  always  have  a  reserve  stock  of  food  here.  I  have  considerable 
faith  myself  in  what  the  lecturer  only  very  lightly  touched  on 
in  one  small  paragraph  —  i.e.,  in  national  granaries.  Why  the 
subject  has  been  so  ignored  in  the  past  is  more  than  I  can  understand. 
The  idea  is  simply  that  the  Government  should  build  a  number  of 
these  granaries  and  store  sufficient  corn  to  supply  our  needs  for 
at  least  twelve  months  or  longer.  This  could  easily  be  done  because, 
although  I  do  not  believe  that  war  will  be  done  away  with,  I  believe 
there  will  be  a  few  years  of  peace  when  this  war  is  at  an  end, 
and  supposing  that  interval  were  five  or  ten  years,  there  would  be  ample 
time  for  the  Government  to  build  the  granaries  and  stock  them  gradually 
with  the  year's  food  supply  without  interfering  in  any  appreciable 
degree  with  the  ordinary  course  of  trade.  Thus,  we  should  do 
away  with  the  necessity  of  subsidising  industry,  which  is  very  bad 
indeed,  and  to  a  considerable  extent  with  dearer  food,  because  we 
should  always  have  this  reserve  which  the  Government  could  use 
if  we  were  being  unfairly  dealt  with.  It  could  be  distributed  by  being 
gradually  put  on  the  market  at  the  end  of  each  year,  so  that  year 
by  year  there  would  be  a  stock  of  new  food  in  store,  and  that,  with  the 
supplies  which  would  be  in  the  hands  of  private  owners  in  the  ordinary 
course  of  trade,  would,  I  believe,  give  us  a  sufficient  reserve,  so  that 
we  should  have  confidence  and  thus  be  able  to  develop  in  the  best 
way  the  trade  of  the  Empire. 

MR.  F.  A.  THOMAS  (Royal  Arsenal  Co-operative  Society) :  I  think 
we  all  agree  on  the  necessity  of  increasing  our  food  supply  ;  but  what 
I  am  particularly  concerned  with  is  how  it  is  going  to  be  done.  Possibly 
we  all  agree  on  the  nationalisation  plan  ;  but  I  am  keenly  interested 
in  the  question  of  how  you  are  going  to  keep  the  people  on  the  land 
when  it  has  been  nationalised.  Some  of  the  speakers  seem  to  think 
that  nationalisation  is  the  be-all  and  end-all.  I  want  to  know,  having 


34 

got  the  men  on  the  land,  having  introduced  your  most  scientific  methods, 
trained  your  men  in  colleges,  got  your  people  going  on  co-operative 
lines  so  far  as  machinery  and  transport  and  so  on  is  concerned — what 
you  are  going  to  do  to  reconcile  the  consumer  and  the  producer  ? 
This  problem  seems  to  be  almost  insoluble.  I  expect  it  is  common 
knowledge  that  the  Board  of  Agriculture,  through  the  agricultural 
organisations  and  the  farmers'  organisations,  advises  the  farmers  by 
telegram  as  to  the  best  markets  and,  in  short,  trustifies  agriculture 
all  over  the  country,  but  it  does  nothing  to  reconcile  the  producer 
with  the  consumer,  and  this  is  the  great  problem  of  the  future.  If  the 
agriculturalist  is  simply  going  to  get  higher  prices,  we,  as  consumers, 
are  still  going  to  be  left  "  in  the  cart."  The  problem  is  dealt  with  by 
the  Co-operative  Wholesale  Society,  inasmuch  as  they  have  gone 
in  for  farming,  and  inasmuch  as  they  distribute  the  profits  among  the 
consumers,  but  that  does  not  deal  with  the  interest  of  the  producer, 
and  it  appears  to  me  that  in  the  future  we  must  get  those  two  things 
working  in  harmony.  I  do  not  know  how  the  problem  is  to  be  solved. 
Perhaps  it  could  be  done  by  a  system  of  profit-sharing  for  the 
agriculturalist  and  treating  the  consumer  on  co-operative  lines. 

MB.  E.  J.  NAYLOR  (London  Society  of  Compositors)  :  There  have 
been  one  or  two  questions  introduced  which  appear  to  be  outside  the 
problems  raised  by  Mr.  Furniss  in  his  paper.  I  suppose  if  a  vote  were 
taken  it  would  be  found  that  we  were  all  in  favour  of  State  ownership, 
and  possibly  the  lecturer  would  agree  to  that ;  but  he  is  dealing  with 
the  problem  as  it  presents  itself.  We  have  capitalistic  governments 
and  capitalism  ruling  in  all  parts  of  the  world,  and  the  question  he  puts 
to  us  is  :  Will  it  be  better  for  us  to  forsake  the  principles  of  free  trade 
which  have,  after  all,  allowed  this  country  to  develop  on  certain  lines, 
or  whether  the  war,  and  the  conditions  set  up  by  the  war,  have  brought 
about  a  change  with  regard  to  our  intentions  or  desires  on  the  fiscal 
question  ?  One  point  not  already  touched  upon  is  the  problem  of  the 
consumer  as  such.  The  consumer,  of  course,  is  the  largest  class  in 
the  community,  because  we  are  all  consumers  ;  and,  as  a  Trade  Unionist, 
I  naturally  applied  the  test  as  to  what  effect  any  change  in  our  fiscal 
system  or  in  our  method  of  international  exchange  of  commodities, 
either  of  agriculture  or  of  manufactured  articles,  would  have  upon  the 
wages  of  the  men  I  represent.  Wages,  of  course,  are  only  a  measure 
of  what  can  be  bought,  and  if  by  a  change  in  the  fiscal  system  you  are 
going  to  increase  the  cost  of  living,  to  the  extent  of  the  taxes  and 
possibly  more  than  that,  then  you  are  bound  to  admit  that  wages 
are  being  reduced  to  that  extent.  Therefore  I  look  twice  at  any 
proposal  which  will  have  that  effect,  and  it  has  been  demonstrated 
that  this  will  be  the  effect  in  the  event  of  the  Government  coming  to  the 
conclusion  that  it  is  necessary  for  a  change  to  be  made  in  our  fiscal 
system.  One  speaker  referred  to  the  fact  that  it  may  be  possible  to 
get  a  system  of  free  trade  with  the  colonies  to  the  exclusion  of  other 
countries.  That  will  not  increase  the  amount  of  agricultural  produce 


35 


grown  in  this  country.  We  all  know  that  preferential  duties  for  the 
colonies  do  not  protect  the  English  farmer,  because  he  cannot  stand 
up  against  the  competition  of  the  colonies.  After  all,  is  it  not  possible 
that  we  are  making  too  much  of  the  scarcity  of  food,  even  in  war  time  ? 
After  three  years  we  can  still  get  a  good  square  meal :  let  us  be  careful 
lest  we  set  up  a  bogey.  This  country  has  been  able  to  main- 
tain its  food  supply  far  better  than  other  countries  which  have  had 
tariff  reform.  Is  it  wise,  is  it  politic  in  the  working-class  interest, 
to  adopt  a  change  of  the  fiscal  system  that  will  mean  increased  cost 
of  food  ?  More  agricultural  produce  could  be  grown  in  this  country, 
but  what  value  is  that  to  the  working-class  of  the  country  if  they  have 
to  pay  more  for  it  ? 

MR.  SANDERSON  FURNISS'  REPLY. 

I  should  like  to  thank  Mr.  Mabbs  for  kindly  undertaking  to  open 
the  discussion  at  such  short  notice,  and  also  for  the  very  great  attention 
with  which  he  has  honoured  my  paper.  In  many  respects  Mr.  Mabbs 
and  I  are  at  one.  He  wants  to  see  agriculture  developed  in  this  country  : 
so  do  I.  He  does  not  like  subsidised  agriculture  :  nor  do  I.  As  to 
the  possibility  of  future  war,  he  thinks  that  we  must  be  prepared  for 
this,  and  must  take  steps  in  regard  to  our  food  supply.  I  do  not  think 
I  take  quite  such  a  gloomy  view  with  regard  to  future  wars  as  Mr. 
Mabbs  or  Mr.  Argyle.  If  we  are  going  to  concentrate  our  energies  on 
preparations  for  the  next  war,  I  am  not  at  all  sure  that  life  will 
be  worth  living.  I  am  therefore  willing  to  take  risks,  and  I  am  not 
prepared,  without  a  great  deal  of  convincing,  to  accept  measures  which 
will,  I  think,  involve  heavy  sacrifices  on  the  part  of  the  people  of  this 
country.  I  am  not  at  all  sure  about  a  subsidised  agriculture  giving 
us  the  protection  we  are  aiming  at,  nor  am  I  sure  that  we  are  going 
to  get  the  food  we  want  to  make  ourselves  self-sufficing  in  a  crisis, 
by  any  such  measure  ;  and  I  doubt  also  whether  that  is  the,  kind 
of  defence  we  really  require.  Therefore,  as  I  say,  I  am  willing  to  take 
risks,  and  develop  agriculture  as  far  as  we  can  on  what  I  call  economic 
lines,  without  subsidies,  and  without  putting  undue  burdens  on  the 
great  mass  of  the  population.  If  our  farms  can  be  improved  and  the 
farmers  induced  to  farm  more  scientifically,  let  them  do  so,  and  let 
us  do  all  we  can  to  persuade  them ;  educate  the  agriculturalist  more, 
and  so  on,  but  do  not  let  us  make  large  sacrifices  at  a  time  when  the 
country  will  be  extremely  poor,  for  what  may  be,  after  all,  merely 
a  will  o'  the  wisp.  As  to  the  question  about  the  people  coming  back 
to  the  land,  Mr.  Mabbs  thinks  that  there  is  too  much  attraction  in  town 
life,  and  also  that  in  the  country  it  is  the  actual  work  on  the  land  which 
is  the  good  thing,  and  not  work  in  other  industries.  I  feel  pretty  certain 
that  you  will  not  get  the  people  back  to  the  land  merely  for  agriculture. 
"  Back  to  the  land  "  is  a  hopeless  cry.  You  won't  get  people  back 
under  present  conditions,  and  I  don't  want  them  to  go  back  under 
those  conditions.  The  only  way  in  which  you  can  get  them  back  is 


by  creating  a  new  life  in  the  country,  and  that  you  can  only  do  by 
getting  some  of  the  interests  of  the  town  into  the  country.  You  have 
to  take  some  of  the  town  life — the  social  and  educational  opportunities — 
into  the  rural  districts.  Mr.  Straker  suggests  an  amendment  on 
page  12,  with  regard  to  my  explanation  of  Protection,  and  I  gladly 
accept  that  amendment :  Protection  is  certainly  due  to  the  belief  of 
certain  persons  as  to  the  importance  of  national  interest.  Mr.  Thomas 
asks  how  I  reconcile  the  interests  of  producers  and  consumers.  I  doubt 
if  these  ever  can  be  entirely  reconciled,  but  at  any  rate  you  won't 
persuade  the  consumer  that  they  are  reconciled  by  giving  subsidies 
to  producers. 


37 
SECOND    SESSION. 


THE  INFLUENCE  OF  THE  WAR  ON 
COMMERCIAL  POLICY. 

By  EDWIN   CANNAN,  M.A.,   LL.D. 
(Professor  of  Political  Economy  in  the  University  of  London). 


As  time  goes  on,  commercial  policy  becomes  more  and  more  con- 
trolled by  considerations  of  employment,  the  dominating  idea  being 
the  increasing  of  employment  or  at  least  the  prevention  of  its  decrease. 
Unfortunately,  it  is  usual  to  regard  every  diminution  of  employment 
in  any  trade  as  an  evil,  and  we  cannot  usefully  approach  the  subject 
of  commercial  policy  without  some  preliminary  examination  of  this 
opinion. 

When  we  work  directly  for  ourselves  we  welcome  with  joy  methods 
and  appliances  which  reduce  the  labour  of  obtaining  any  particular 
article,  even  if  we  want  little  or  no  more  of  the  article  than  we  have 
been  getting.  Just  now,  we  all  garden  for  ourselves,  and  know  how 
nice  it  is  to  get  a  more  effective  tool  or  to  learn  of  some  method  which 
saves  labour  in  digging  or  hoeing.  We  do  not  regret  the  lost  labour. 
Nor  do  we  make  reservations  in  favour  of  skilled  labour  :  we  cheerfully 
scrap  our  laboriously  acquired  talents  if  they  are  rendered  unnecessary 
by  the  discovery  of  new  methods  or  implements.  The  situation  is 
obviously  the  same  whenever  a  number  of  people  co-operate  consciously. 
There  is  no  reason  to  suppose  that  a  purely  communistic  society  would 
have  the  slightest  objection  to  adopting  labour-saving  methods  or 
appliances  :  the  labour  saved  would  be  regarded  as  a  pure  gain,  since, 
if  little  or  no  more  of  the  article  produced  by  it  is  required,  it  can  be 
applied  in  other  directions,  with  the  result  of  an  increased  total  of 
desirable  results,  or  it  could  be  simply  abandoned  in  favour  of  greater 
leisure. 

But  when  we  co-operate  unconsciously  by  way  of  selling  our  own 
products  and  buying  those  of  other  people  with  the  proceeds,  changes 
in  the  direction  of  labour-saving  generally  have  an  unpleasant  side. 
It  may  happen,  of  course,  that  the  demand  for  the  article  is  so  elastic 
that  when  its  production  is  made  twice  as  easy  and  the  price  falls  to 
one-half  of  what  it  was,  a  double  quantity  will  be  sold.  In  that  case, 
no  inconvenience  will  be  felt :  there  will  be  no  reduction  of  employment 
in  producing  the  article.  People  are  apt  to  think  that  this  should 
always  be  so,  but  in  fact,  of  course,  the  demand  for  most  things  is  not 
and  cannot  be  so  elastic.  It  is  much  more  usual  for  the  demand  to 


28 

be  such  that  an  increase  of  production  proportionate  to  the  reduction  of 
labour  will  cause  such  a  fall  of  price  that  there  will  be  less  available  for 
the  remuneration  of  the  labour,  so  that  if  all  the  previous  workers  insist 
on  continuing,  their  position  will  be  worsened  ;  the  same  number  can 
only  be  employed  if  they  submit  to  i  educed  earnings  ;  otherwise 
some  must  be  excluded,  which  of  course  involves  hardship,  or  at  the 
very  least  inconvenience,  varying  in  degree  chiefly  with  the  suddenness 
of  the  change.  There  is,  of  course,  nothing  exceptional  or  anomalous 
in  this.  In  the  case  of  an  individual  producing  things  for  himself, 
a  transfer  of  labour  from  one  kind  of  production  to  another  can  be 
effected  without  inconvenience  or  hardship  by  the  exercise  of  the 
sovereign  power  wielded  by  his  brain.  In  the  case  of  a  communistic 
society  transfers  of  labour  from  one  occupation  to  another  would  be 
effected  similarly  without  hardship  to  the  persons  concerned  by  simple 
decree  of  the  labour  ministry  or  whatever  department  of  government 
was  entrusted  with  the  distribution  of  individuals  between  employ- 
ments. But  in  society  as  we  have  it,  people  are  attracted  into  employ- 
ments and  deterred  from  joining  them,  kept  in  them  and  driven  out  of 
them,  by  the  different  and  changing  comparative  advantages  which 
they  offer  as  means  of  earning  a  living. 

Recognition  of  this  hardship  is  of  course  the  most  substantial  cause 
of  the  sympathy  which  is  widely  felt  with  those  who  resist  labour- 
saving  methods  and  appliances.  But  the  whole  of  the  dislike  for 
reductions  of  particular  kinds  of  employment  which  prevails  cannot 
be  thus  accounted  for.  Much  of  it  comes  simply  from  a  fundamental 
misconception  which  leads  people  to  suppose  that  labour  itself  is  wanted 
instead  of  merely  the  things  which  labour  produces,  and  which  are 
not  wanted  because  labour  produces  them,  but  are  produced  by 
labour  because  they  are  wanted .  The  habit  of  talking  of  each  particular 
industry  as  "  supporting "  or  "  maintaining "  those  who  follow  it 
leads  people  insensibly  into  the  belief  that  the  industry  directly  supports 
or  maintains  those  who  follow  it  in  such  wise  that  a  diminution  in  its 
amount  would  diminish  the  whole  society's  means  of  maintaining  its 
numbers.  If  we  say  that  boot-making  supports  bootmakers,  we  are 
apt  to  fall  into  thinking  that  if  we  grew  boots  with  as  little  trouble  as 
fingernails  and  with  no  more  nourishment  than  at  present,  society, 
to  be  as  well  off  as  it  is,  would  have  to  be  less  numerous  by  the  whole 
number  of  persons  employed  in  bootmaking.  With  some  muddle  of 
this  kind  in  our  minds  we  become  inclined  to  regard  every  "  expansion 
of  industry  "  (in  the  sense  of  more  labour  being  devoted  to  any  par- 
ticular kind  of  production)  as  a  good,  and  every  contraction  as  an  evil. 
We  are  prone  to  rejoice  indiscriminately  over  every  increase  of  numbers 
employed  in  any  trade,  and  to  mourn  indiscriminately  over  every 
decrease.  We  even  sometimes  go  further,  and  rejoice  not  only  over 
an  absolute  increase  of  numbers  but  over  an  increasing  percentage 
of  the  whole  number  being  employed  in  a  trade,  while  at  the  same  time, 
in  defiance  of  elementary  arithmetic,  we  mourn  over  a  decreasing 
percentage  employed  in  another  trade  !  The  stock  example  is 


39 

agriculture.  Throughout  history  increasing  knowledge  and  civilisation 
have  enabled  mankind  to  get  the  raw  materials  supplied  by  the  surface 
of  the  earth  for  human  food  and  clothing  with  greater  and  greater  ease, 
so  that  a  larger  proportion  of  human  labour  time  has  been  gradually 
made  available  for  working  up  that  raw  material  into  more  refined 
forms.  Labour  being  divided,  the  diminution  in  the  proportion  of 
the  labour  time  required  for  providing  the  coarsest  necessaries  of  life 
has  naturally  meant  a  diminution  in  the  proportion  of  the  whole 
population  which  has  to  be  employed  in  agriculture,  and  a  setting  free 
of  a  larger  proportion  for  supplying  other  and  more  refined  wants. 
Yet  when  has  mankind  been  without  weeping  and  wailing  over  "  the 
decay  of  agriculture  "  ?  The  greatest  sign  of  human  progress  has 
been  constantly  treated  as  something  to  be  deplored  and,  if  possible, 
prevented. 

If  progress,  when  it  requires  absolute  or  comparative  reductions  in 
the  number  of  persons  employed  in  particular  trades,  affected  all 
countries  equally,  there  would  be  much  less  resistance  to  these  re- 
ductions. The  ordinary  person  generally  knows  little  of  what  is  going 
on  in  other  countries,  and  constantly  assumes  unconsciously  that  a 
change  which  he  sees  proceeding  in  his  own  country  is  not  in  fact 
going  on  in  other  countries.  But  he  can  be  told,  and  it  is  often  a  great 
comfort  to  him  when  he  is  certain  that  some  symptom  indicates  that 
his  own  country  is  going  to  the  dogs,  if  he  can  be  assured  that  other 
countries  show  the  same  symptoms  in  equal  degree.  But  of  course 
progress  does  not  affect  countries  equally,  and  consequently  we  have 
not  only  redistribution  of  mankind  between  different  occupations, 
but  also  redistribution  of  the  persons  following  each  particular  occupa- 
tion between  the  various  countries.  Invention  of  new  methods  of 
transport,  coupled  with  the  more  general  provision — by  accumulation 
of  capital — of  the  material  machinery  required  to  utilise  the  invention, 
is  the  most  obvious  of  such  causes.  It  has  made  it  possible  and  desirable 
to  redistribute  agriculturists  and  manufacturers,  reducing  the  propor- 
tion of  agriculturists  and  raising  that  of  manufacturers  in  the  old 
countries,  while  not  doing  so  or  not  doing  so  in  the  same  degree  in  the 
new  countries. 

But  changes  in  transport  are  not  the  only  things  which  affect  the 
distribution  of  industry.  Technical  changes  in  the  industries  themselves, 
the  exhaustion  of  old  sources  for  the  supply  of  raw  materials,  and  the 
discovery  of  new  sources,  developments  in  education  and  a  host  of  other 
things,  are  constantly  making  it  desirable  that  particular  industries 
should  grow  more  slowly,  cease  to  grow,  or  even  decline  in  some 
situations,  while  they  grow  or  grow  more  largely  in  others.  The 
general  tendency  in  history  has  been  towards  greater  and  greater 
territorial  division  of  labour  or  localisation  of  industry — that  is  to  say, 
greater  concentration  of  particular  kinds  of  work  in  particular  dis- 
tricts. To  put  a  larger  proportion  of  an  industry  in  one  place  obviously 
involves  leaving  less  in  another,  so  that  concentration  is  necessarily 
accompanied  by  denudation — as  an  industry  gets  localised  in  some 


40 

districts,  it  declines  in  others.  So  long  as  this  process  takes  place 
within  the  confines  of  a  single  national  area  there  is  little  or  no  complaint. 
We  hear  nothing  of  the  calamitous  situation  of  the  South  Eastern 
counties  .  owing  to  the  disappearance  of  the  iron  industry  from  the 
Weald,  nor  of  the  misfortunes  of  Wiltshire  owing  to  the  woollen 
industry  having  increased  more  rapidly  in  Yorkshire. 

But  when  the  redistribution  is  not  between  different  districts  of 
the  same  national  area,  but  between  different  national  areas,  popular 
feeling  is  quite  different.  Then  in  each  national  area  or  country 
concentration  is  regarded  with  favour  so  long  as  the  concentration 
takes  place  in  that  country,  while  the  denudation  is  deplored  and 
usually  obstructed  by  government.  Each  country  is  quite  willing  to 
accept  any  increase  of  industry  due  to  the  increasing  concentration, 
but  is  unwilling  to  accept  the  necessary  denudation.  The  various 
publics  fail  to  realise  the  very  elementary  fact  that  it  is  just  as  true 
of  any  number  of  human  beings  as  it  is  of  one,  that  if  they  give  a 
larger  proportion  of  their  time  to  one  kind  or  a  few  kinds  of  work, 
they  must  give  less  to  the  other  kinds.  If  an  industry  is  concentrated 
in  a  country,  it  means  that  the  inhabitants  of  that  country  deliberately 
make  more  of  something  or  other  than  they  want  themselves  in  order 
to  exchange  the  excess  for  something  else  which  is  provided  by  the 
inhabitants  of  other  countries.  If  they  change  their  minds  and  resolve 
to  make  these  other  things  for  themselves  they  must  willy-nilly  give 
up  concentration  on  the  first  lot :  they  cannot  have  time  to  make 
both,  and  they  do  not  require  both.  Thus,  local  or  national  increase 
of  an  industry  due  to  greater  concentration  must  necessarily  be  accom- 
panied by  local  or  national  decline  of  some  other  industry  or  industries. 

The  war  is  likely  to  form  an  important  landmark  with  regard  to 
both  general  and  local  declines. 

Firstly,  lest  us  consider  its  relation  to  general  declines.  The  extreme 
urgency  of  the  case  when  whole  peoples  have  imagined  themselves, 
generally  without  grounds,  to  be  fighting  "  for  their  lives,"  or  at  least 
"  for  their  national  existence,"  has  led  to  the  overcoming  of  much 
resistance  to  easier  methods  of  production.  It  is  one  of  the  cruellest 
ironies  of  the  war  that  hindrances  of  this  kind  should  have  been  easier 
to  remove  when  people  were  struggling  to  destroy  each  other  than  when 
they  were  peacefully  co-operating  in  the  production  of  things  generally 
desired.  But  so  it  is,  and  many  authorities  hope  that  the  gain  made 
in  this  direction  may  offset — at  any  rate,  to  a  large  extent — the  loss 
caused  by  the  destruction  of  life  and  limb  and  by  the  check  to  the 
accumulation  of  new  instruments  of  production.  Various  schemes  are 
being  mooted  for  securing  that  resistance  to  this  kind  of  improvement 
shall  be  less  in  the  future  than  it  has  been  in  the  past. 

My  impression  is  that  a  good  deal  of  useless  advice  is  being  given. 
Employers  are  told  that  they  have  been  wrong  in  not  allowing  the 
employed  to  reap  the  benefit  of  changes  which  reduce  the  amount  of 
labour  required  to  produce  particular  articles.  This  would  be  right 


41 

enough  if  the  employers  were  able  to  keep  the  advantage  to  themselves  ; 
but  what  actually  happens  in  the  long  run — and  usually  in  a  not  very 
long  run — is  that  the  advantage  of  a  less  costly  form  of  production 
is  secured  by  the  purchasers  of  the  product  in  the  shape  of  a  reduced 
price.  Improvements  in  the  production  of  an  article  thus  cheapen 
the  article  while  leaving  the  remuneration  of  the  producers  at  the 
accustomed  level  compared  with  the  remuneration  of  producers  of 
other  things.  This  surely  is  the  common-sense  solution  :  if  a  thing 
become  easier  to  produce  let  it  be  produced  in  greater  quantity  and 
be  cheaper — do  not  pay  the  producers  more.  There  seems  no  real 
ground  for  paying  them  more,  and  to  do  so  is  practically  impossible 
because  of  the  difficulty  of  selection.  If  potato-growing  is  made 
twice  as  easy  by  some  invention,  it  would  be  not  only  senseless  to  say 
potato  planting  and  digging  was  to  be  higher  paid,  but  futile,  unless 
you  give  some  kind  of  monopoly  to  a  limited  class  and  face  the  difficulty 
of  saying  who  is  to  be  admitted  to  that  class.  Otherwise,  there  will 
be  enough  independent  potato-growing  to  keep  down  the  price  to  a 
figure  which  will  not  yield  the  proposed  extra  remuneration. 

The  real  cure  seems  to  be  the  simple  one  of  greater  versatility. 
The  resistance  to  improved  methods  comes  from  the  reluctance  which 
people  very  naturally  feel  to  agree  to  anything  which  involves  a  diminu- 
tion of  the  demand  for  the  particular  kind  of  labour  which  they  can 
offer.  To  get  rid  of  this  reluctance  altogether  is  of  course  impossible, 
but  its  force  will  be  diminished  by  every  increase  in  versatility  which 
makes  the  maintenance  of  demand  for  the  particular  kind  of  labour 
less  vitally  important  to  the  persons  concerned.  And  here  I  see  one 
of  the  very  few  good  effects  of  the  war  which  I  personally  have  been 
able  to  recognise.  It  does  seem  as  if  the  war  will  have  enormously 
increased  the  versatility  of  the  present  generation.  The  amount  of 
change  of  occupation  has  been  enormous,  and  in  consequence  quite  a 
large  proportion  of  men  and  women,  who  before  were  only  experienced 
in  one  kind  of  work,  are  now  experienced  in  two,  three,  or  even  in  more 
kinds.  Moreover,  everyone  is  accustomed  to  the  idea  of  versatility, 
and  convinced  that  it  is  much  easier  to  acquire  the  skill  necessary  for 
most  occupations  without  either  training  in  youth  or  a  very  long 
training  in  later  life.  This,  I  think,  is  one  of  the  most  hopeful  features 
of  the  present  situation.  Old  stick-in-the-mud  Europe  has,  in  respect 
of  this  matter,  become  one  of  the  "  new  countries  "  which  owe  so  much 
of  their  superiority  to  the  greater  versatility  of  their  inhabitants. 

Trade  Unions  will  have  to  accommodate  themselves  in  some  way  to 
the  psychological  change  which  will  have  taken  place.  When  men 
become  more  versatile  they  will  not  feel  so  much  identity  of  interest 
with  an  organisation  representing  a  small  branch  of  industry  and  nothing 
else.  To  be  useful,  labour  organisation  must  represent  persons  and  not 
an  abstraction.  The  union  which  represents  a  trade  no  longer  necessary 
to  society  is  of  no  further  use.  The  general  shake-up  of  the  war  in 
making  these  facts  more  obvious  will  undoubtedly  be  beneficial,  though 
an  outsider  may  be  excused  from  offering  suggestions  about  the  manner 


42 

in  which  labour  organisation  should  meet  the  case.     I  expect  it  will 
find  a  way. 

With  respect  to  the  other  branch  of  the  subject,  resistance  to  national 
contractions  of  particular  employments,  which  is  the  branch  with  which 
we  are  concerned,  the  prospects  of  mankind  do  not  appear  so  unclouded. 
The  war  has  inflamed  slumbering  tribal  animosities  and  has  created 
pseudo-tribal  animosity  between  most  of  the  people  who  happen  to  live 
in  the  dominions  of  the  two  sets  of  belligerents,  whatever  their  race 
may  be,  and  animosity  is  unfavourable  to  clear  thought  and  prudent 
action.  We  need  not  indeed  attach  much  importance  to  the  insensate 
ravings  of  banqueters  who  break  the  plates  in  an  English  hotel  because 
they  were  imported  from  Germany  before  the  war,  or  of  their  friends 
who  wreck  the  shop  of  a  baker  who  is  fighting  for  them  in  France, 
because  his  wife  employs  a  German  to  fill  his  place  in  his  absence — 
a  German  who,  in  all  probability,  left  his  native  country  because  he  was 
not  enamoured  of  it.  Such  froth  will  soon  disappear.  The  memories 
of  nations  are  short — so  short  that  in  the  past  only  a  few  years  have 
usually  been  requisite  to  turn  enemies  into  allies  and  allies  into  enemies. 
The  plate-breaking  heroes  of  the  Savoy  probably  thirsted  for  war 
with  Russia  over  Penjdeh  and  the  Dogger  Bank  incident,  with  the 
United  States  over  the  Venezuelan  boundary  and  with  France  over 
Fashoda  ;  and  the  wreckers  of  the  bakery  might  easily  be  led  against 
any  foreigner  who  presumed  to  provide  them  with  any  of  the  necessaries 
of  life.  But  it  does  seem  as  if  the  present  war  has  been  more  successful 
in  exciting  lasting  animosity  than  most  modern  wars.  A  generation 
or  two  must  pass  before  the  sufferings  and  indignities  endured  by  the 
people  of  areas  occupied  by  hostile  armies  will  be  forgotten.  The 
London  school  children  slaughtered  outright  by  the  German  aviators, 
and  the  Karlsruhe  school  children  slaughtered  outright  by  the  British 
and  French  aviators,  may  be  forgotten  in  a  few  years,  and  their  graves 
be  untended  like  those  of  their  fellows  who  die  from  natural  causes 
or  poverty  and  neglect,  but  those  who  were  only  maimed  will  continue 
for  the  remainder  of  their  lives  to  excite  the  indignation  of  their  com- 
patriots against  the  cruel  enemy.  We  cannot  doubt  that  hostile 
sentiments  between  enemies  will  be  acute  for  a  long  time,  and  it  seems 
to  me  that  it  would  be  sanguine  to  suppose  that  its  effects  will  be  any- 
where near  counterbalanced  by  growth  of  affection  between  allies. 

Nor  is  this  matter  of  sentiment  the  only  disquieting  factor.  There 
are  others  perhaps  more  practically  important. 

In  the  first  place,  the  war  has  forced  most  countries  to  be  more 
self -sufficient  than  they  were.  The  self -sufficiency  has  been  disagree- 
able enough  to  the  people  who  want  the  imported  articles  and  have  had 
to  put  up  with  inferior  and  much  dearer  substitutes,  but  it  has  favoured 
those  who  produce  these  substitutes,  and  they  rather  naturally  desire 
to  stick  to  what  they  have  gained.  The  position  is  just  the  same  as 
it  was  in  this  country  at  the  end  of  the  great  war  a  hundred  years  ago 
The  agriculturists  then  had  got  used  to  receiving  enormously  high 
prices,  and  they  could  not  bear  the  idea  of  a  drop  on  the  conclusion  of 


43 


peace.  They  therefore  persuaded  themselves  and  the  legislature 
that  the  salvation  of  the  country  depended  on  keeping  the  price  of 
wheat  up  to  80s.,  and  obtained  legislation  intended  to  secure  that 
object — legislation  which  was  happily  unsuccessful,  and  had  little 
result  except  some  aggravation  of  agricultural  depression.  We  see 
now  in  the  papers  paragraphs  headed  "  No  more  cheap  foreign  glass," 
giving  accounts  of  the  determination  of  persons  concerned  in  the 
manufacture  to  prevent  their  fellow-citizens  from  buying  an  important 
building  material,  not  from  the  enemy  but  from  the  Belgians.  There 
is  nothing  new  in  this  :  one  effect  of  war  always  has  been  to  provide 
temporary  protection  for  industries  which  thereupon  clamour  to  have 
the  protection  made  permanent,  and  have  usually  some  partial  success 
followed  by  reaction  later. 

Secondly,  the  State,  in  this  and  other  important  belligerent  countries, 
has  succeeded  in  securing  the  support  of  labour  organisations  and  thus 
nationalising  in  a  certain  degree  the  labour  movement.  Finding  it 
impossible  to  make  head  against  their  enemies  without  better  support 
than  that  afforded  by  the  usual  organs  of  Government,  the  States  have 
struck  up  alliances  with  the  trade  organisations  and  have  used  them 
freely  for  the  purpose  of  allaying — or,  at  any  rate,  smothering- 
discontent.  The  most  cherished  prejudices  of  the  governing  classes 
have  been  jettisoned  in  view  of  the  paramount  necessity  of  winning 
the  war.  Lord  Willoughby  de  Broke  is  alleged  to  have  sung  "  The  Ked 
Flag,"  German  army  commands  are  said  to  have  fraternised  with 
trade  union  secretaries,  and  Cabinets  undoubtedly  consist  of  the 
most  amazing  compounds  of  "  prancing  exproconsuls  "  and  "  pestilent 
labour  agitators." 

The  bringing  in  of  labour  to  national  governments  at  the  moment 
when  these  governments  are  engaged  in  an  immense  military  conflict 
of  absorbing  interest  is  a  most  inauspicious  event.  You  know  how 
men  who  work  for  an  organisation  of  any  kind  are  apt  to  put  the  good 
of  the  organisation  before  the  end  for  which  it  was  founded.  Persons 
in  the  service  of  the  State  are  specially  inclined  to  this.  I  have  many 
friends  who  have  temporarily  given  their  services  to  the  State,  and 
I  have  been  astonished  at  the  rapidity  with  which  most  of  them  become 
identified  with  the  machine  which  they  imagine  themselves  to  be 
working,  but  which  really  works  them.  For  three  long  years  the 
machines  which  are  each  called  by  their  subjects — subjects  is  the  right 
word — The  State,  as  if  there  was  only  one  State  in  the  world,  have 
been  working  not  to  create  but  to  destroy,  and  those  who  have  been 
tending  them  will  have  greatly  lost  their  perception  of  the  true  ends 
of  life.  Thinking  perpetually  of  warfare,  they  -are  sure  to  shrink  from 
allowing  the  people  of  their  respective  countries  to  increase  their 
"  dependence  "  upon  the  people  of  other  countries  by  the  increase  of 
international  commerce.  A  good  example  of  the  manner  in  which  evil 
associations  obstruct  clear  thought  was  given  us  last  spring  when 
one  of  the  new  Labour  ministers  declared  that  he  would  not  allow  any 
foreign  steel  to  come  into  his  country  till  all  the  steel  works  in  it  were 


44 

fully  occupied.  There  was  in  his  mind  not  the  smallest  consideration 
of  the  question  in  what  proportion  it  is  really  desirable  that  the  world's 
production  of  steel  should  be  divided  between  the  various  countries, 
but  just  a  thoughtless  acquiescence  in  the  standard  provided  by  the 
number  and  magnitude  of  the  steel  works  which  happened  to  be  present 
in  his  own  country  early  in  1917.  Why  1917  ?  Why  not  some  other 
year  ?  Is  it  true  that  not  only  that  what  is,  is  right,  but  also  that  it 
must  never  be  changed  ? 

Can  nothing  be  done  to  cope  with  these  sinister  influences  by  cold 
reasoning  ?  Possibly  something.  It  may  do  good  to  point  out  the 
absurdities  involved  in  the  belief  that  concentration  of  particular 
industries  in  particular  countries  is  undesirable,  or  at  any  rate  that  its 
extension  beyond  that  already  attained  in  1917  (or  whatever  is  the  date 
of  the  controversy)  is  undesirable.  It  may  do  good,  too,  to  point  out 
the  extreme  unsuitability  of  existing  national  areas  to  be  economic 
units,  each  striving  for  self-sufficiency.  If  the  world  is  to  be  divided 
into  units  striving  for  self-sufficiency,  surely  the  division  ought  to  be 
made  by  a  boundary  commission  of  economists,  trade  unionists,  or 
such  other  persons  as  we  may  suppose  competent  to  order  industrial 
matters.  The  present  national  areas  were  never  marked  out  by  such 
people.  They  have  come  down  to  us  from  feudal  times,  have  been 
modified  by  modern  wars  and  have  no  claim  whatever  on  economic 
grounds.  If  you  took  the  map  of  the  world  and  tried  to  divide  it  into 
suitable  areas  for  self-sufficiency  you  would  find  yourself  enlarging 
the  first  country  you  took  in  hand  and  enlarging  it  more  and  more 
till  at  last  there  were  no  others. 

The  cult  of  national  self-sufficiency  is  incompatible  with  peace,  since 
it  must  inevitably  render  warfare  perpetual  by  making  it  necessary  for 
each  nation  to  grab  territory  which  contains  the  source  of  some  product 
which  it  has  not  got  in  its  existing  territory  and  which  it  must  have  in 
order  to  be  self-sufficient.  We  have  seen  a  little  of  this  already ;  it 
would  be  more  and  more  serious,  the  more  intense  the  worship  of  self- 
sufficiency.  Supposing  the  bigger  empires  managed  to  settle  down 
to  an  uneasy  peace,  what  would  become  of  the  smaller  countries  ? 
What  is  to  become  of  Denmark,  Switzerland,  Portugal,  when  the  big 
countries  reached  a  high  degree  of  self-sufficiency  and  would  not  deal 
with  them  ?  They  must  join  the  bigger  countries,  and  soon  there  would 
be  only  two  or  three  great  powers  in  the  world  which,  after  a  second  or 
third  Armageddon,  would  be  reduced  to  one  by  some  struggle  for  the 
source  of  some  indispensable  article. 

Such  arguments  may  seem  telling  enough  in  the  countries  which  are 
too  small  to  allow  the  lust  of  power  to  flourish.  But  in  the  greater 
empires  they  are  likely  to  fall  on  deaf  ears  so  long  as  the  present  state 
of  sentiment  prevails.  In  each  of  these,  people  will  be  found  to  believe 
that  their  own  country  is  the  best  situated  for  the  struggle.  In  the  large 
scattered  empire  of  which  the  parts  are  separated  by  long  distances 
over  sea,  people  think  they  can  best  be  independent  of  outside  supplies 
because  their  dominions  extend  into  every  zone  of  temperature  and 


45 

include  every  kind  of  soil.  In  the  smaller  but  compact  empire  the 
weaknesses  of  the  larger  but  more  scattered  one — its  liability  to  succumb 
to  submarine  attack  for  example — are  clearly  perceived,  and  it  is  hoped 
that  the  more  compact  area  will  win  through  with  the  aid  afforded 
by  science  in  providing  substitutes  for  imported  products.  So  long 
as  the  question  is  considered  from  a  purely  national  point  of  view, 
and  so  long  as  patriotism  is  confounded  with  contempt  and  hatred 
of  other  nations,  we  may  doubt  if  argument  directed  to  show  the 
suicidal  character  of  the  gospel  of  self-sufficiency  will  have  much  effect 
in  the  greater  countries.  When  two  men  desirous  of  killing  each  other 
are  locked  together  in  the  water,  it  is  not  much  use  to  tell  them  to  let 
go  if  each  thinks  the  other  will  drown  first. 

Even,  however,  without  any  expectation  of  cold  reasoning  about 
either  exclusive  or  mutual  advantage  producing  much  effect  in  the 
present  state  of  international  sentiment,  we  may  hope  for  some  improve- 
ment owing  to  the  discredit  into  which  the  more  important  belligerent 
States  will  have  fallen  by  the  end  of  the  war.  The  war  is  no  longer 
popular  in  Europe,  though  it  is  said  to  be  so  in  America,  where  it  is 
only  beginning  ;  it  will  be  less  popular  before  it  ends,  and  in  the  appal- 
ling slump  which  will  follow  the  inflation  by  the  aid  of  which  it  has 
been  carried  on,  it  will  be  universally  execrated.  The  independent 
States  are  responsible  for  it,  and  none  of  the  greater  ones  can  escape 
responsibility  by  pleading  that  it  was  not  their  fault  but  the  others', 
since,  if  they  did  not  want  the  war,  they  ought  to  have  taken  more 
efficient  steps  to  prevent  its  occurrence.  Moreover,  they  have  each 
saddled  themselves  with  a  load  of  debt,  made  much  greater  than  it 
need  have  been  by  their  insensate  issues  of  paper  money  which  have 
raised  prices  against  them,  and  quite  impossible  for  most  of  them  to  bear. 
Breakdowns  under  the  burden  will  deprive  them  of  the  one  and  only 
means  by  which  modern  wars  can  be  carried  on,  while  continued 
bearing  of  the  burden  will  involve  taxation  wholly  incompatible  with 
popularity.  Some  of  the  existing  States  will  probably  disappear 
altogether,  and  those  that  remain  will  find  their  power  immensely 
reduced.  The  Labour  movement  will  cease  to  regard  the  capture  of 
such  discredited  institutions  as  an  object  of  desire,  and  will  not  only 
be  thrown  back  into  greater  reliance  on  its  own  organisations,  but  will 
also  tend  to  make  those  organisations,  wherever  possible,  ignore 
national  boundaries.  This  will  greatly  weaken  the  forces  which  resist 
necessary  and  desirable  redistribution  of  industries  between  different 
countries.  An  organisation  representing  that  part  of  a  trade  which  is 
situate  in  a  single  country  can  scarcely  fail  to  support  any  measures 
which  will  prevent  its  being  superseded  by  greater  growth  in  another 
country.  But  an  organisation  which  represents  both  parts  of  the  trade 
will  regard  the  transfer  with  equanimity. 

All  this  might  be  urged  even  if  no  fundamental  change  in  our  political 
system  were  impending — even  if  it  were  likely  that  we  should  be 
content  after  this  war  to  sink  back  into  the  old  condition  of  preparing 
for  the  next  one.  For  my  part,  however,  I  regard  that  as  a  state  of 


46 

things  which,  if  possible  at  all,  could  only  endure  for  a  very  short  time. 
The  possibilities  of  preparation  are  now  seen  to  be  so  great  that  prepara- 
tion for  the  next  war  would  mean  the  giving  up  by  the  whole  population 
of  every  kind  of  commodity,  service,  and  enjoyment  beyond  the  very 
barest  necessaries  of  life.  No  people  will  stand  that,  and  the  inevitable 
consequence  will  be  the  introduction  of  some  kind  of  world-government 
which  will  put  an  end  to  what  is  called  national  independence — that 
is,  the  right  to  go  to  war  claimed  by  the  present  national  States.  These 
States,  or  those  of  them  that  remain  and  the  others  that  take  their  place, 
will  then  drop  into  the  relative  position  which  different  Dominions  of 
the  British  Empire  at  present  occupy  in  regard  to  each  other,  and  we 
may  derive  some  useful  ideas  from  the  parallel. 

Though  the  different  Dominions  of  the  British  Empire  have  no  right 
and  (perhaps  therefore)  no  inclination  to  go  to  war  with  each  other, 
they  seem  at  first  sight  to  show  much  the  same  desire  for  self-sufficiency 
as  independent  countries,  and  obstruct  trade  in  much  the  same  way. 

Therefore,  it  may  be  said,  the  different  countries  in  a  Worldish  Empire 
in  which  autonomy  without  power  to  go  to  war  was  established  would 
adopt  much  the  same  commercial  policies  as  they  do  at  present.  But 
we  may  well  doubt  whether,  if  this  were  true  at  first,  it  would  continue 
to  be  so  for  any  length  of  time,  for  two  reasons.  In  the  first  place,  the 
tendency  of  the  British  Dominions  to  strive  for  self-sufficiency  is  much 
less  marked,  and  is  becoming  less  and  less  so,  in  relation  to  other  parts 
of  the  British  Empire,  than  it  is  in  relation  to  foreign  countries  with 
which  the  possibility  of  war  is  present.  In  the  second  place,  it  is  likely 
that  such  cult  of  self-sufficiency  as  really  prevails  is  largely  due  to 
unconscious  imitation  of  the  independent  and  war-making  States. 
In  a  Worldish  Empire  there  will  be  no  foreign  countries,  and  the  tradi- 
tion of  the  war-making  States  will  be  gradually  dying.  Consequently, 
from  the  first,  we  may  expect  a  less  vigorous  adoption  of  obstructive 
commercial  policies,  and  as  time  goes  on  we  may  reasonably  expect 
it  to  become  further  and  further  relaxed. 


Professor  Cannan,  speaking  on  his  paper,  said  that  his  object  had 
been  to  recall  the  pre-war  position  and  to  suggest  the  post-war  position, 
rather  than  to  propose  changes.  He  had  laid  great  stress  on  the 
unsatisfactory  way  in  which  progress  was  constantly  obstructed  by 
the  opposition  to  diminution  of  the  amount  of  labour  employed  in 
particular  directions.  It  might  be  thought  unnecessary  to  point  this 
out,  but  the  discussion  on  the  previous  day,  in  which  so  many  speakers 
had  dwelt  on  the  desirability  of  having  more  people  employed  in 
agriculture,  regardless  of  the  end  for  which  agriculture  existed,  showed 
that  it  was  not  unnecessary  to  do  so,  even  in  a  meeting  like  the  present. 
The  tendency  throughout  the  whole  history  of  civilisation  had  been 
for  a  smaller  and  smaller  proportion  of  people  to  be  employed  in  agri- 
culture, and  we  ought  to  look  upon  this  with  satisfaction  and  not 
with  annoyance.  There  was  a  smaller  proportion  of  people  employed 


47 

in  agriculture  in  the  civilised  parts  of  the  world  than  in  the  uncivilised 
parts,  but  this  did  not  mean  that  the  civilised  parts  were  not  so  well 
fed  ;  on  the  contrary,  famines  occurred  in  the  uncivilised  parts.  As 
to  industry  generally — he  said — it  must  be  recognised  that  you  could 
not  specialise  in  some  forms  of  industry  without  losing  others.  He 
could  not  understand  the  objections  to  emigration.  Why  should  not 
the  population  distribute  itself  and  fill  all  the  empty  portions  of  the 
world  in  order  to  prevent  so  rapid  an  increase  in  the  fuller  portions  ? 
A  good  result  of  the  war  was  that  many  new  industrial  methods  had 
been  introduced  which,  in  spite  of  the  trouble  and  ill-feeling  they  had 
caused  in  some  cases,  might  lead  to  good  results.  On  the  other  hand, 
the  war  had  caused  a  certain  amount  of  international  hatred  which 
prevented  clear  thinking ;  but  the  good  results  were  likely  to  pre- 
dominate if  they  were  given  a  little  time.  The  State  idea  was  likely 
to  be  considerably  weakened  ;  that  was  a  good  thing,  because  the  State 
idea  was  one  of  the  causes  of  international  quarrels.  The  end  of  the 
present  war  would  not — he  believed — bring  a  period  of  preparation 
for  the  next  war,  but  rather  a  settling  down  to  a  permanent  peace. 
Let  them  think  what  preparation  for  the  next  war  would  mean.  The 
adoption  of  an  agricultural  policy  with  the  idea  of  providing  for  the 
next  war  would  mean  this  :  if  more  food  were  grown  and  more  people 
employed,  these  people  on  the  outbreak  of  war  would  be  called  off  to 
fight,  and  agriculture  would  be  less  productive  again  at  once.  The 
plan  of  granaries  was  much  more  feasible,  as  only  people  to  distribute 
the  stores  would  be  required.  Granaries  could  also  be  made  bomb- 
proof, but  fields  of  wheat  could  not  be  protected  from  incendiary 
attacks  by  aircraft.  Besides  building  enormous  bomb-proof  granaries, 
it  would  be  necessary  to  rearrange  factories,  in  order  that  they  might 
easily  be  turned  into  munition  works.  There  would  be  no  luxuries  ; 
industrial  conscription  from  the  earliest  age  would  be  necessary  ;  and 
arrangements  would  have  to  be  made  for  training  young  men  for  the 
army  and  girls  for  munition  factories  while  they  were  still  at  school, 
so  that  they  could  be  turned  on  at  a  moment's  notice.  The  British 
Islands  would  become  an  outpost  of  the  British  Empire,  rather  difficult 
to  hold,  with  a  constantly  renewed  store  of  ammunition  and  food  for  a 
five  years'  war  and  a  smaller  population.  This  is  what  preparation 
for  the  next  war  would  mean,  and  no_  one  need  imagine  that  this 
country  would  be  a  fit  place  to  live  in. 


QUESTIONS. 

Question :  Can  Professor  Cannan  tell  us  how  far  commercial  policy 
will  be  influenced  in  the  future  by  the  enormous  destruction  of  capital 
which  is  going  on  in  all  nations  ? 

Answer  :  I  have  not  thought  it  out,  but  I  think  we  shall  all  be  more 
or  less  in  the  same  boat.  It  might  have  made  a  larger  difference  had 
not  the  United  States  entered  the  war. 


48 

Question  :  Mr.  Cannan  said  it  was  a  little  contemptible  for  us  to 
be  always  weeping  and  wailing  at  the  decay  of  Agriculture.  Was  it 
not  possible  that  when  we  were  speaking  of  the  decay  of  agriculture 
we  really  had  in  our  minds  the  larger  question  of  the  decay  of  rural  life 
generally,  and  that  it  was  in  fact  the  decay  of  what  we  might  call  one 
of  the  most  wholesome  and  healthy  influences  in  our  whole  national 
life? 

Answer  :  I  have  no  fear  of  it.  I  do  not  look  back  to  a  time  in  which 
country  life  was  very  much  better  than  it  is  at  present :  on  looking 
back  I  find  the  people  were  mostly  serfs,  and  though  their  condition 
is  anything  but  satisfactory  at  present,  I  do  not  think  it  is  any  worse 
than  it  was,  and  it  is  more  likely  to  improve  in  the  future  if  a  better 
policy  be  adopted. 

Question :  Does  the  lecturer  think  that  the  land  of  this  country  is 
most  economically  cultivated  ? 

Answer  :  I  do  not  think  it  is.  I  am  not  really  a  competent  judge  ; 
but  is  any  country  scientifically  cultivated  ?  If  anything,  I  should 
think  this  country  has  got  rather  too  many  people  employed  on  the 
land  :  we  could  do  with  fewer  people  and  more  scientific  employment 
of  machinery — those  few  would  be  better  paid  :  the  others  might  be 
in  America  and  Australia,  and  I  do  not  think  they  would  be  any  worse 
off  than  they  are  at  present. 

Question:  Regarding  the  issue t of  paper  money  and  the  effect  on 
prices.  Could  the  professor  tell  us  whether  there  has  been  more 
paper  money  issued  than  gold  abstracted  from  the  present  currency  ? 

Answer  :  If  you  take  all  the  world  together  there  is  immensely  more 
paper.  A  great  deal  has  been  issued  by  all  the  belligerents  :  in  Russia 
the  amount  of  paper  money  has  been  duplicated  ten  times.  That, 
of  course,  has  led  to  gold  becoming  a  drug  on  the  market,  because  it 
has  been  driven  out  of  circulation  by  all  this  paper,  and  you  cannot 
isolate  this  country  so  far  as  that  is  concerned.  You  can  only  isolate 
it  to  a  very  limited  extent  with  regard  to  £1  and  10s.  notes.  The  issue 
now  is  greater  than  the  amount  of  gold  :  it  is  being  increased  about 
1J  millions  a  week.  It  is  ridiculous  for  governments  to  water  the 
currency  on  the  one  hand  and  try  to  cut  down  prices  on  the  other. 

Question  :  Is  it  not  a  fact  that  land  is  not  cultivated  sufficiently, 
owing  to  private  ownership,  and  would  not  State  ownership  remedy 
this? 

Answer  :   No — from  what  I  have  seen  of  State  management. 

Question  :  Does  the  lecturer  favour  a  system  which  has  been  suggested 
whereby  the  Government  should  give  preferential  treatment  to  certain 
trades  ? 

Answer :  No. 


49 

Question  :  Will  the  lecturer  kindly  elaborate  the  last  nine  or  ten 
lines  on  the  bottom  of  page  41  ? 

Answer :  I  think  that  is  rather  more  than  a  question.  I  have  already 
said  what  I  have  to  say.  The  drift  of  that  paragraph  is  that  it  is  your 
business  and  not  mine. 

Question  :  Does  not  the  professor  think  that  the  versatility  of  labour 
which  he  regards  as  one  of  the  most  hopeful  signs  of  the  present  situation 
is  likely  to  lead  to  certain  industrial  troubles  which  would  entirely 
take  away  any  advantage  which  he  may  see  in  it  ? 

Answer :  My  view  is  that  everything  leads  to  trouble.  I  am  not 
one  who  is  always  deprecating  trouble  in  the  sense  of  disputes  ;  I 
think  they  are  in  the  nature  of  things,  and  are  not  to  be  grumbled  at ; 
if  you  do  not  lose  your  temper  there  is  not  so  much  lost.  We  must 
put  up  with  difficulties  of  that  kind. 

Question :  Does  the  professor  favour  State  management  ?  Does 
he  base  his  arguments  against  it  on  experience  of  State  management 
in  this  country  or  in  other  countries  ? 

Answer :  On  universal  experience,  not  only  in  this  country  during 
the  war  but  before  the  war,  and  in  other  countries  at  all  times. 

Question  :  What  would  be  the  effect  of  increased  versatility  on  the 
specialisation  of  labour  spread  over  a  large  field  of  industry  ? 

Answer  :  I  take  greater  versatility  to  mean  that  people  can  acquire 
specialised  industry  more  quickly  and  easily,  and  I  should  say  the 
result  of  that  is,  that  alterations  in  the  specialisation  required,  owing 
to  the  introduction  of  machinery  and  so  on,  would  be  carried  out  with 
less  difficulty  and  suffering  to  the  persons  affected  than  if  it  did  not 
exist.  Everyone  knows  that  an  individual  who  has  several  kinds  of 
special  skill  is  in  a  far  better  position  than  one  who  has  only  one, 
when  changes  occur. 

Question  :  Does  the  professor  think  that  in  consequence  of  the  war 
there  will  be  any  effect  on  the  commercial  policy  at  all  ?  Does  he  not 
think  that  when  our  hot  blood  is  down,  international  socialism  and 
eo-operation  will  allow  the  commercial  policy  to  go  on  in  the  same 
way  as  it  did  ? 

Answer :  My  moods  are  different — sometimes  I  am  optimistic  and 
sometimes  pessimistic. 

Question  :  Is  not  State  ownership  of  the  land  the  only  safeguard 
in  the  interests  of  the  community  ? 

Answer  :  I  do  not  regard  it  with  much  favour.  I  am  not  prepared 
to  discuss  land  nationalisation  at  the  moment. 


50 

DISCUSSION. 

MR.  NEWLOVE  (General  Secretary,  Postal  and  Telegraph  Clerks' 
Association) :  It  seems  to  me  that  there  are  a  number  of  very 
important  as  well  as  interesting  thoughts  brought  out  by  this  paper. 
We  are  brought  back  to  what  always  has  appeared  to  me  a  fundamental 
question,  namely,  the  attitude  which  people  adopt  towards  the  diminu- 
tion of  employment.  This  question  raises  what  is  in  some  senses  an 
inconsistency.  Diminution  of  employment,  whether  from  the  point 
of  view  of  employer  or  workman,  is  an  evil.  But  under  a 
rational  system  of  society  this  would  not  be  so ;  and  it  does 
not  matter  whether  you  are  the  employer  using  capital,  or  the 
workman  using  labour,  under  the  peculiar  system  of  organising 
our  affairs  that  we  now  have,  what  ought  to  be  an  advantage  is  un- 
doubtedly not  only  an  evil  but  a  disaster  to  a  great  many  people. 
Why  is  this  ?  To  my  mind  the  answer  is  simply  because  all  our  pro- 
duction of  material  things  does  not  take  place  with  primary  regard 
for  the  utility  of  the  thing  that  is  being  produced,  but  to  serve 
personal  ends.  An  employer  undertakes  to  produce  machines  because 
he  thinks  he  is  going  to  make  something  out  of  it :  a  workman  goes  into 
an  industry  because  he  thinks  that  by  giving  a  certain  number  of 
hours  in  the  week  he  will  get  a  certain  number  of  shillings  for  it,  and 
neither  of  them  have  very  much  regard  as  to  the  real  utility  of  the  thing 
they  are  producing.  This  is  responsible,  I  think,  for  the  antagonism 
(and  I  do  not  think  this  term  is  too  strong)  which  workpeople  have 
towards  the  introduction  of  labour-saving  machinery.  They  see  that 
one  of  the  first  results  of  such  improvements  which  ought  to  be  a  social 
blessing  is  really  a  social  evil — it  means  throwing  aside  the  human 
factor  without  any  regard  to  what  becomes  of  the  personality  inherent 
in  that  human  factor.  It  is  all  very  well  for  the  orthodox  economists 
to  say  to  us  :  "  These  things  always  right  themselves  in  time  ;  all  the 
people  displaced  from  industry  as  the  result  of  a  new  machine  will 
later  on  find  their  level."  This  is  not  very  much  consolation  to  the  poor 
individuals  who  are  thrown  aside  as  the  result  of  a  big  development  of 
machine  production  in  industry.  I  have  always  been  dissatisfied  with 
this  explanation,  because  it  does  not  meet  the  difficulty.  In  regard  to 
that,  we  are  brought  to  the  generally  accepted  view  that  the  comparative 
advantage  of  different  trades  determines  the  amount  of  capital  and 
labour  which  shall  go  into  them.  I  am  not  inclined  to  accept  Professor 
Cannan's  easy  explanation.  I  do  not  think  the  great  majority  of  work- 
people enter  a  particular  trade  because  of  the  comparative  advantages 
which  that  trade  has  over  others.  To  the  great  majority  of  the 
sons  and  daughters  of  the  working-class  population,  it  is  not  a  queston 
of  this  at  all — they  have  to  go  somewhere,  and  that  seems  to  bring 
us  back  to  our  great  social  problem.  In  the  past  we  have  not  had 
sufficient  regard  as  to  how  our  industries  should  be  organised,  neither 
have  we  had  sufficient  regard  as  to  how  our  children  shall  be  employed. 
For  the  most  part  it  is  not  a  question  of  choice  ;  and  therefore  the 
professor's  explanation  does  not  satisfy  me. 


51 

» 

With  regard  to  the  question  of  the  decline  of  agriculture  : 
I  am  rather  inclined  to  agree  with  the  lecturer  that  the  people 
who  say  we  shall  rejuvenate  agriculture  by  bringing  more  people 
on  to  the  land,  are  labouring  under  a  delusion.  Nothing  of 
the  sort  will  happen,  and  I  quite  agree  that  under  a  proper  system 
of  scientific  agriculture  you  will  probably  have  proportionately 
less  people  employed  :  you  always  have  more  people  working  in  badly 
organised,  uneconomic  industry.  When  we  talk  of  decline  we  must 
consider  it  not  so  much  from  a  national  but  rather  from  an  international 
or  world  point  of  view.  In  this  respect  the  decline  of  agriculture  is  a 
relative  term,  and  closely  connected  with  the  subject  of  the  paper 
read  yesterday.  To  my  mind,  the  question  to  be  answered  is  :  Does 
it  matter  very  much  whether  in  any  particular  country  you  have  a 
diminution  of  any  particular  industry — in  this  case  agriculture — if  at 
the  same  time  in  consequence  of  the  development  of  other  countries 
you  are  able  to  supply  your  needs  ?  My  answer  is  that  it  does  not 
matter.  If  you  are  going  to  bolster  up  a  particular  industry  or  occupa- 
tion at  the  price  of  national  efficiency,  then  I  for  one  am  not  going  to 
subscribe  to  that  method,  because  it  will  not  stop  at  agriculture.  If 
you  are  going  to  subsidise  agriculture,  why  not  engineering,  pottery 
making,  and  the  textile  trades?  — in  short,  why  not  subsidise  everything, 
and  if  you  do  that  you  are  simply  bringing  yourself  back  to  the  position 
of  living  by  taking  in  each  other's  washing,  and  that  is  not  sound  policy. 
Professor  Cannan  says  that  the  increase  of  one  industry  involves 
the  decline  in  some  other  ;  he  seems  to  be  quite  certain  that  he  is 
right,  and  I  am  equally  certain  that  he  is  wrong,  even  if  you  take  it 
as  an  abstract  proposition.  I  think  it  is  quite  conceivable  that  an  increase 
in  one  industry  may  go  on  at  a  greater  rate  than  in  another  ;  but 
to  say  that  if  you  take  any  number  of  people  out  of  industry  A,  that  thej 
will  go  into  industry  B,  seems  altogether  too  easy  a  way  to  get  rid  of 
the  problem.  It  is  quite  possible  you  might  have  a  development 
of  all  your  industries,  and  that  the  extension  of  one  need  not  go  OB 
at  the  expense  of  another,  or  a  number  of  others. 

I  am  very  glad  that  two  or  three  people  tried  to  get  the  Professor  to 
elucidate  what  he  said  at  the  bottom  of  page  41,  and  I  must  return  to  the 
charge.  If  there  is  one  thing  we  expect  from  a  Professor  it  is  that  he  should 
give  us  a  little  light  and  leading,  but  on  this  question  he  left  us  severely 
alone.  No  commercial  policy  organised  by  government  is  going  to  be 
of  any  use  unless  it  is  useful  to  the  industrial  situation  of  the  country 
itself,  and  the  industrial  situation  must  obviously  involve  a  considera- 
tion of  this  very  question  of  versatility.  Let  me  say  right  away  that 
I  would  not  be  prepared  to  accept  the  principle  of  versatility  for  one 
moment  unless  I  knew  what  was  going  to  happen  as  a  result  of  it. 
Nor  unless  I  knew  that  the  attitude  of  those  who  organise  the  productive 
system  of  this  country  was  going  to  be  very  different  towards  trade 
unions  in  the  future  from  what  it  has  been  hitherto.  If  you  want  the 
organised  workers  to  accept  the  principle  of  versatility  you  must 
bring  the  trade  unions  into  consultation  as  to  the  organisation  of 


52 

« 

industry  more  than  ever  ;  if  you  do  not,  you  are  sacrificing  the  whole 
of  the  working  classes ;  and  any  trade  union  official  who  allowed 
himself  to  give  the  smallest  amount  of  support  to  this  principle  of 
change  from  one  industry  to  another  without  knowing  exactly  how 
it  was  going  to  be  used,  would  be  false  to  his  charge.  The  trade  union 
position  with  regard  to  versatility  is  absolutely  fundamental  in  regard 
to  any  change  in  commercial  policy.  Unless  the  attitude  of  the  trade 
union  is  made  quite  clear,  you  are  going  to  have  industrial  trouble  ; 
and  you  do  not  get  over  this  trouble  by  simply  saying  that  it  is  in 
the  nature  of  things. 

I  now  come  to  the  question  as  to  what  effect,  if  any,  this  war  will  have 
upon  the  policy  which  the  nations  have  pursued  in  the  past  in  regard  to 
exchanging  their  surplus  produce.  This  is  important ;  and  I  thoroughly 
agree  with  one  of  the  speakers  that,  after  all,  it  would  probably  work 
itself  down  to  this  :  when  all  the  excitement  and  antagonism  and 
bitterness  between  the  nations  is  over,  whether  they  be  belligerents 
or  allies,  commercial  policy  will  probably  go  on  exactly  as  before. 
All  this  talk  about  brotherhood  does  not  enter  into  the  question  of 
international  trade  :  John  Brown  of  Manchester  does  not  exchange 
his  cotton  goods  with  Mr.  Scheidemann  in  Berlin  because  he  loves 
him,  but  simply  because  he  can  give  him  a  good  exchange  at  a  profit- 
it  is  simply  a  question  of  £.  s.  d.  If  this  is  so,  we  have  this  fact  to  face  : 
the  geographical  position  of  the  belligerents  and  the  allies  will  be 
precisely  the  same  when  the  war  is  over  as  it  was  before.  As  the 
Professor  points  out,  and  as  we  all  know,  there  will  be  a  terrific  debt 
which  will  hang  around  the  necks  of  the  nations  engaged  in  this  war, 
and  one  of  the  first  things  we  are  going  to  look  out  for  is  how  cheaply 
we  can  get  the  things  we  need.  That  is  only  natural  in  view  of  the 
enormous  bill  we  have  to  meet  when  this  business  is  over.  If  this  is  so. 
can  one  conceive  for  a  moment  that  the  Russian  people,  for  example, 
are  going  to  send  over  to  England  for  certain  of  their  necessaries  of 
life  because  England  has  been  an  ally,  when  they  have  at  their  very 
doors  a  nation,  who  at  the  present  moment  is  by  accident  an  enemy, 
which  is  in  a  position  to  supply  them  with  some  of  those  things  ten 
times  better  than  we  are  ?  That  is  not  going  to  be  done.  Neither 
the  working  man  nor  his  wife  will  want  to  pay  more  than  is  necessary. 
All  the  wives  will  be  interested  about  will  be  how  much  can  they 
get  for  their  30s.  or  £2  a  week  housekeeping  money,  and  they  will  not 
worry  much  about  who  was  the  enemy  or  who  was  the  ally.  It  is 
quite  clear  that  you  are  going  to  have  much  the  same  commercial 
policy  in  the  exchange  of  commodities  as  you  had  before.  On  the 
whole  it  is  an  advantageous  position. 

One  more  point  which  relates  to  this  question.  I  think  we 
can  brush  aside  as  really  impracticable  the  resolutions  which 
were  agreed  to  at  the  Paris  Conference  not  so  very  long  ago. 
If  ever  there  was  an  absurdity,  and  particularly  in  a  war,  those 
Paris  resolutions  are  about  the  limit.  You  cannot  build  up 
your  future  relations  on  any  economic  basis  such  as  they  propose 


53 

to  lay  down.  I  think  we  shall  find,  as  Professor  Cannan  points  out, 
that  national  areas  are  not  the  proper  basis  for  an  economic  unit ; 
there,  I  think,  we  have  the  kernel  of  the  whole  situation  ;  and,  if  this 
is  so,  we  shall  have  at  the  end  of  the  war  to  look,  roughly  speaking,  for 
the  same  set  of  circumstances  and  the  same  principles  regarding 
the  exchange  of  surplus  commodities  between  nations,  which  prevailed 
before  the  war. 


GENEKAL  DISCUSSION. 

MB.  HIRST  (Tramway  and  Vehicle  Workers)  :  When  I  tried  to 
draw  the  lecturer  to  give  a  little  more  explanation  about  the  bottom 
of  page  41,  I  had  in  mind  the  same  idea  as  Mr.  Newlove — that  we  in 
the  trade  union  movement  are  sometimes  accused  of  looking  on  our 
side  of  the  question  from  a  prejudiced  point  of  view — and  I  was  anxious 
to  get  the  Professor's  point  of  view  on  some  of  the  things  he  men- 
tioned. He  makes  two  assertions  which  I  should  like  to  have  his 
reasons  for.  (1)  That  Trade  Unions  will  have  to  accommodate  them- 
selves in  some  way  to  the  change  which  will  have  taken  place  as  to  versa- 
tility. I  entirely  agree,  but  I  would  like  to  know  how  it  is  to  be  done. 
(2)  That  Trade  Unions  which  represent  a  trade  no  longer  .necessary  to 
society  should  cease  to  exist.  How  shall  we  arrive  at  that  position  ? 
Most  unions  find  themselves  in  th:-  position  some  time  or  another 
that  a  certain  section  of  their  members  are  no  longer  necessary,  while 
other  sections  are  necessary.  How  are  we  going  to  arrive  at  the 
exact  position  where  a  union  represents  a  trade  which  is  no  longer 
necessary.  A  discussion  took  place  in  the  Trade  Union  Congress  on 
the  question  of  Industrial  Unionism  between  the  Miners'  organisation 
and  the  Colliery  and  Enginemen's  society,,  and  undoubtedly  if  we 
take  up  the  view  of  industrial  unionism  pure  and  simple,  the  miners  have 
right  on  their  side  in  trying  to  get  all  men  connected  with  mines  to 
be  members  of  their  organisation ;  but  the  Colliery  and  Enginemen's 
society  have  also  right  in  saying  that  these  men  are  not  part  of  the 
miners'  organisation,  and  are  not  always  working  in  mines,  and  may 
want  sooner  or  later  to  go  back  into  their  own  organisation.  I  shoulcT 
like  to  know  whether  the  lecturer  has  not  in  mind  that  industrial 
unionism,  rather  than  trade  unionism,  is  the  thing  we  ought  to  aim  at. 
and  whether  we  ought  not  to  sacrifice  these  smaller  unions  in  order 
to  attain  that  object  ? 

MR.  DEWSBURY  (Walsall  Co-operative  Society)  :  I  am  in  agreement 
with  the  Professor  in  regard  to  versatility,  but  I  am  only  in  agreement 
if  we  also  capture  the  organisations  which  the  Professor  tells  us  it  is 
no  use  us  capturing.  We  can  only  agree  with  the  versatility  idea 
if  we  also  capture  the  State  organisation  which  can  so  organise  trade 
according  to  the  requirements  of  the  people,  that  it  will  not  matter 
a  button  to  the  men  engaged  in  industry  whatever  industry  they  may 
be  in— their  living  will  be  assured,  and  that  is  all  that  anybody  wishes 


54 

for.     On  page  45  he  tells  us  that  the  "  Labour  movement  will  come 

to ignore  national  boundaries."     That  may  be  all  very  well 

in  the  far-off  future,  but  we  have  to  take  things  as  they  are  to-day, 
and  we  know  that  national  boundaries  will  continue  for  a  considerable 
period  yet.  It  is  therefore  our  only  course  to  capture  the  government 
of  the  particular  State  to  which  we  belong,  in  order  that  we  can  so 
adjust  commerce  and  trade  within  our  own  area  that  there  will  be  no 
hardship  to  anybody  engaged  in  industry.  With  that  proviso,  I  think, 
we  should  all  be  prepared  to  accept  the  Professor's  theory  of  versatility. 
I  quite  agree  with  the  Professor  in  regard  to  the  spirit  that  will  come, 
after  the  war  is  over.  We  are  all  taught  to  suppose  that  we  shall 
regard  our  allies  as  friends  and  our  enemies  as  enemies  for  all  time. 
History  proves  that  our  enemies  of  yesterday  may  be  our  allies  to- 
morrow. In  regard  to  the  war  debt,  I  would  like  to  know  to  whom 
this  debt  is  owing.  The  Professor  spoke  of  bankruptcy :  a  great 
proportion  of  this  national  debt  is  really  owing  to  ourselves,  and  I  do 
not  see  that  we  are  very  much  poorer  to-day  than  we  were  before  the 
war.  People  talk  about  our  heaping  up  a  great  load  of  debt,  but  if 
the  debt  were  wiped  out,  would  any  of  us  be  the  poorer  ? 

MR.  RUDLAND  (President,  Birmingham  Trades  Council) :  I  think 
the  real  enemies  are  those  at  home  who  exploit  every  situation  and  act 
in  such  a  way  as  to  make  wars  probable.  The  working  class  of  this 
country  will  have  to  see  that  such  things  are  prevented  when  the 
right  time  comes.  We  shall  have  to  make  sure,  by  a  different  and 
securer  system  of  government  and  a  proper  understanding  by  the 
people,  that  the  capitalists  are  not  in  a  position  to  exploit  our  children, 
and  that  our  commercial  policy  is  framed  on  lines  which  will  make 
for  the  peace  and  happiness  of  the  common  people  of  the  whole  of  the 
world.  It  seems  to  me  that  we  have  to  realise  the  state  of  trade  and 
organisation  that  exists  at  the  present  time,  and  not  only  what  position 
it  will  be  in  when  the  war  ends.  We  have  to  realise  the  revolutionary 
change  which  has  come  about  in  industry  and  commerce,  and  that 
we  shall  have  an  entirely  different  set  of  facts  to  deal  with.  It  appears  to 
me  that  we  have  to  take  a  new  line  of  policy  as  to  trade  unionism  alto- 
gether. The  doctrine  that  we  shall  get  what  we  are  strong  enough  to 
enforce  will  have  to  be  supplemented  by  a  wider  and  securer  policy :  we 
shall  have  to  realise  that  we  have  to  take  a  hand  in  the  game,  that  we  our- 
selves have  got  to  come  in  and  help  to  control  and  manage  industry.  The 
idea  of  production  for  profit  and  not  for  use  must  stop  if  we  are  going 
to  get  very  far.  If  we  are  going  to  adopt  this  view,  however,  Labour 
itself  has  got  to  be  not  only  more  efficient,  but  it  has  to  study  the 
science  of  management  and  control.  But  what  attitude  are  we  going 
to  adopt  towards  international  trade  ?  Are  you  going  to  adopt  tariffs  ? 
What  is  going  to  be  your  policy  with  regard  to  Germany,  for  example  ? 
Are  you  going  to  insist  that  she  shall  make  things  under  fair  conditions- 
is  that  going  to  be  your  commercial  policy  ?  Are  you  going  to  put  up 
a  high  tariff  wall  if  they  are  not  made  under  fair  conditions  ?  Another 


C5 

problem  is,  if  we  have  to  control  industry,  how  are  we  going  to  put 
up  the  capital  to  run  it  ?  That  will  require  all  our  thought  and  attention . 
I  believe  that  the  problem  of  commercial  policy  after  the  war  can  be 
solved  on  co-partnership  or  co-operative  lines. 

MR.  HALSTEAD  (Co-operative  Productive  Federation)  :  I  think  the 
Professor  is  clearly  up  against  those  of  us  who  represent  the  producers" 
interest.  We  had  that  challenge  in  his  introduction  this  morning  : 
he  said  that  we  wanted  agriculture  for  food — did  it  matter  where  we 
got  it  from  ?  If  we  simply  wanted  food,  the  condition  of  production 
and  the  result  of  different  forms  of  production  did  not  matter.  I 
challenge  the  Professor  there.  We  might  as  well  go  back  to  slavery 
because  slavery  produced  food.  The  paper,  to  my  mind,  does  not 
take  sufficient  note  of  those  other  factors  which  Mr.  Furniss  pointed 
out  yesterday— the  political  and  ethical  factors.  And  I  think  the 
discussion  yesterday  proved  that  another  factor  should  be  taken  into 
account — that  is,  physiology.  If  we  approach  it  from  that  standpoint 
it  matters  very  much  for  us  as  consumers  whether  the  conditions  of 
production,  both  of  food  and  clothing,  with  a  sufficient  amount  of 
employment,  tend  to  make  the  producers  healthy,  happy  human 
beings.  With  regard  to  agriculture  :  I  do  not  agree  with  protection 
in  the  ordinary  sense,  or  with  the  Corn  Production  Act.  I  would  not 
do  it  by  subsidies  ;  but  I  think  we  can  do  it  by  promoting  agricultural 
education  as  much  as  possible.  Let  your  subsidies  be  used  to  make 
agriculture  more  efficient.  You  will  be  subsidising  in  a  certain  sense, 
but  it  will  be  a  subsidy  that  will  pay. 

MR.  MABBS  (Coventry  Trades  Council)  :  It  seems  to  me  that  if 
this  war  is  going  to  be  of  any  use  to  the  working  classes  of  this  country 
we  shall  have  to  shake  up  our  views  as  much  as  we  possibly  can,  because 
it  has  revealed  a  good  many  things  we  have  never  dreamt  of  before. 
Before  the  war,  the  advanced  labour  leader  thought  he  said  quite 
sufficient  when  he  told  us  that  what  we  wanted  was  the  nationalisation 
and  the  State  management  and  control  of  everything.  Personally 
I  think  that  if  this  war  has  revealed  nothing  else,  it  has  revealed  the 
fallacy  of  nationalisation  and  control  of  everything  ;  but  that  does  not 
mean  that  capitalism  and  individual  ownership  is  not  a  bad  thing. 
We  all  agree  that  is  absolutely  bad  from  the  working-class  point  of 
view,  because  it  for  ever  condemns  the  workers  to  be  controlled  by 
somebody  else  ;  but  we  have  to  realise  there  is  a  possibility  that 
with  national  ownership  and  control  we  are  going  to  set  up  government 
by  bureaucracy,  which  would  be  worse  for  the  working  class.  That 
question  was  gone  into  somewhat  fully  at  the  Oxford  Conference. 
We  have  to  look  in  the  direction  of  national  ownership  and  control 
by  the  people  working  in  the  industries.  I  am  very  much  at  one  with 
the  Professor  with  regard  to  what  he  says  about  versatility  of  workers 
in  industry,  although  I  think  it  wants  stating  rather  differently.  We 
have  to  shake  up  our  ideas  ;  we  have  to  forget,  and  to  cease  to  think 


56 

in  terms  of  craft,  and  to  begin  to  think  as  members  in  industry.  You 
have  to  forget  that  because  you  were  born  a  compositor  you  are  going 
to  be  one  for  the  rest  of  your  life  and  because  you  are  born  a  printing 
works  labourer  you  are  not  to  be  allowed  to  become  a  compositor. 
You  of  the  craft  industries,  who  believe  that  you  are  going  to  keep 
everybody  out,  must  break  down  your  restrictions.  You  are  in  the 
same  position  as  the  squire  who  says  you  were  born  a  labourer  and  must 
stop  there.  You  are  debarring  those  with  possibly  the  same  ability 
from  taking  advantage  of  the  opportunity  of  using  their  higher  in- 
telligence. This  is  exactly  the  same  as  the  squire  did  of  old  and  the 
capitalist  class  are  doing  now.  When  I  talk  about  control  I  do  not 
mean  the  setting  up  of  a  joint  control  of  industry  with  the  capitalist 
on  the  one  hand  and  the  working  class  on  the  other.  That  is  a  very 
popular  cry  at  the  present  time — and  a  very  dangerous  tendency  too. 
We  have  got  to  recognise  that  while  the  enmity  of  the  people  of 
England  and  Germany  is  ephemeral  and  will  pass,  the  enmity 
between  the  capitalist  class  and  the  workers  is  eternal,  or  for 
as  long  as  the  present  system  lasts.  We  have  not  to  patch  up 
here  and  there,  but  we  have  to  make  fundamental  alterations  in  the 
construction  of  society  or  else  all  our  efforts  will  simply  leave  us  in 
the  same  position  as  we  were  before  the  war. 

MR.  C.  P.  PARKIN  (York  Equitable  Co-operative  Society,  Ltd.)  : 
On  page  42  the  lecturer  says  "  A  generation  or  two  must  pass  before 
the  sufferings  and  indignities  endured  by  the  people  of  areas  occupied 
by  hostile  armies  will  be  forgotten."  That  kind  of  bitterness  is  apparent 
outside  the  areas  where  hostile  armies  are  in  occupation  ;  but  I  believe 
that  the  influence  of  the  war  on  people's  minds  will  be  largely  what 
we  make  it  or  what  we  allow  other  people  to  make  it.  For  some 
considerable  time  the  Press  of  this  country  have  been  telling 
the  public  that  we  must  have  nothing  more  to  do  with  Germany, 
and  some  Chambers  of  Commerce  are  taking  the  same  line.  If  the 
workers  are  not  on  the  look  out,  other  people  will  dictate  the  after - 
the-war  policy  :  it  is  up  to  the  workers  to  see  that  they  have  a  say 
in  it. 

DR.  CARLYLE  :  One  or  two  speakers  suggested  it  would  be  well  if 
we  were  to  fix  our  attention  clearly  upon  one  point.  I  take  it  Mr. 
Cannan's  paper  is  really  intended  to  warn  us  against  allowing  ourselves 
to  drift  into  the  conception  of  the  desirability  of  national  economic 
self-sufficiency.  He  recognises  the  fact  that  in  the  country  at  large 
there  are  very  strong  tendencies  in  the  industrial  commercial  world, 
which  rather  make  for  the  idea  that  after  the  war  we  are  to  be  self- 
supporting — to  grow  food  and  live  upon  ourselves  through  our  own 
exertions.  I  think  there  has  been  no  more  unfortunate  speech  made 
during  the  last  two  years  than  that  by  Mr.  Hodge,  and  I  am  rather 
glad  to  think  that  Mr.  Hodge's  attitude  is  not  shared  by  the  repre- 
sentatives of  Labour  in  the  country.  We  can  easily  repudiate  the 
idea  at  first  sight,  but  there  are  no  doubt  certain  conceptions  involved 


57 

which  may  prove  to  be  dangerously  attractive  to  all  members  in  the 
community,  and  the  point  I  should  venture  to  urge  is  this  :  the  idea 
of  self-sufficiency  is  one  which  does  appeal  in  a  measure  to  the  idea 
of  stability  in  trade — the  idea  that  we  can  secure  a  permanence  of 
conditions  in  trade,  industry,  and  employment,  and  that  a  man  who  is 
engaged  upon  a  certain  industry  to-day  will  be  able  to  remain  in  that 
industry  to-morrow.  We  must  make  up  our  minds  that  industry  is 
not  going  to  secure  a  permanence  of  the  particular  kind  of  employment 
in  which  men  are  occupied  to-day.  I  think  we  ought  to  repudiate 
the  idea  of  self-sufficiency — it  is  the  most  mischievous  of  all  doctrines. 
We  must  make  up  our  minds  that  industrial  occupation  will  be  per- 
petually shifting  and  changing,  and  we  must  reckon  upon  the  con- 
tinuous changing  of  conditions  in  industry.  The  Professor,  having 
gone  as  far  as  he  did,  ought  to  have  gone  a  little  further  and  suggested 
what  society  ought  to  do  with  reference  to  the  fact  that  we  are  going 
to  have  free  interchange  of  commodities,  and  the  shifting  of  occupations. 
Are  we  really  going  to  leave  the  industrial  population  of  this  country 
to  bear  the  burden  of  this  continual  shifting  ?  That  is  what  we  have 
done  in  the  past.  Shall  we  allow  this  weight  to  be  borne  by  the  people 
least  able  to  bear  the  burden  ?  I  think  the  Professor's  premises 
ought  to  carry  him  rather  further ;  we  are  compelled  to  recognise 
that  the  precarious  uncertainty  and  the  continuous  movement  and 
shifting  of  industry  which  necessarily  accompanies  international 
exchange  of  commodities  will  compel  us  to  move  towards  some  other 
organisation  of  the  industrial  world  than  that  which  we  have  known 
in  the  past.  This  left  us  in  face  of  a  condition  of  things  of  which  we 
are  reaping  the  result  to-day — the  result  of  class  against  class  and  man 
against  man  ;  if  we  are  going  to  face  the  new  world,  we  must  face 
it  not  only  with  free  interchange  of  commodities  but  with  enterprise. 
We  must  take  upon  ourselves  the  burden  of  the  conditions  of  the  whole 
community.  I  was  very  much  interested  in  Mr.  Newlove's  and  Mr. 
Mabbs'  speeches.  I  venture  to  say  that  what  is,  after  all,  clear  enough 
is  that,  however  the  old-fashioned  older  socialist  doctrines  may  be, 
and  however  true  it  may  be  that  our  experience  in  the  war  has  not 
tended  to  raise  our  opinion  of  the  capacity  of  the  State,  one  thing  is 
clear,  viz.,  that  in  the  extreme  case  the  community  as  a  whole  can 
intervene,  and  that  in  order  to  meet  the 'exigencies  of  the  future  the 
community  itself  will  have  to  intervene.  Mr.  Cannan  has  pointed  out 
that  the  possibility  of  the  life  of  society  depends  upon  the  recognition 
of  the  necessary  mutual  interchange  of  commodities  between  the  whole 
world,  but  that  brings  with  it  also  the  conclusion  that  within  our  par- 
ticular national  society  the  character  and  the  conditions  of  industrial 
life  will  have  to  be  accepted  as  being  the  responsibility  of  the  whole 
community.  We  want  change,  but  not  mere  chaotic  revolution  ; 
we  want  change,  and  must  have  it,  but  a  rational  and  considered  change 
can  only  come  if  the  community  as  a  whole  recognises  its  respon3ibility 
to  make  the  conditions  of  life  for  the  industrial  world  tolerable,  while 
this  continual  shifting  and  movement  of  industry  is  taking  place. 


58 

PROFESSOR  CANNAN'S  REPLY. 

Mr.  Newlove  spoke  about  changes  of  occupation.  Of  course  it  is 
very  difficult  to  say  exactly  how  much  freedom  there  is  as  to  the  choice 
or  change  of  occupation  at  the  present  time.  I  think  we  are  perhaps 
a  little  apt  to  assume  the  amount  from  what  we  have  read,  and  our 
rhetorical  statements  about  the  matter  are  not  from  our  own  experience. 
In  the  first  place,  children  must  be  directed,  and  surely  that  will 
always  be  the  case  to  a  great  extent  whatever  organisation  you  have- — 
you  cannot  expect  a  child  to  be  able  to  decide  for  itself.  The  choice 
must  depend  upon  somebody  else,  and  at  present  it  depends  mostly 
on  the  parents.  What  really  is  true  is  that  somehow  or  other 
the  occupations  which  want  more  labour  in  the  interests  of  society 
do  somehow  get  it,  subject  to  certain  deductions  owing  to  inequalities 
of  distribution.  If  you  had  the  control  of  things  you  would  not  get 
a  much  different  result.  There  is  a  very  considerable  measure  of  truth 
in  the  old  idea  that  people  generally  are  in  the  occupations  where  they 
are  required.  With  regard  to  change  of  employment,  you  say  that 
certain  trades  are  done  a  way  ..with  by  improvements  in  production, 
and  that  the  people  who  specialised  in  these  employments  are  thrown 
out  of  work.  There  have  been  great  hardships  in  the  past,  and  there 
are  some  at  the  present  time  ;  but  from  your  own  experience  ask  your- 
self whether  they  are  as  great  as  you  would  imagine  them  to  be  from 
an  abstract  point  of  view,  and  then  ask  yourself  whether  you  do  not 
think  from  what  you  have  read  of  the  past  that  things  have  been 
considerably  improved  in  that  way,  and  that,  as  a  matter  of  fact, 
these  things  do  not  happen  with  quite  such  disastrous  effect  as  they 
used  to  do.  Our  hope  of  the  future  in  this  matter,  it  seems  to  me,  is 
that  the  arrangements  of  the  industrial  world  should  make  for  further 
progress  in  that  direction,  and  that  brings  me  to  the  bottom  of  page 
41,  which,  as  I  expected,  proved  to  be  rather  dangerous  ground.  I  am 
not  prepared  to  say  what  exactly  ought  to  be  done,  or  how  far  you 
ought  to  go.  Why  not  ?  I  am  a  Professor  of  Economics  and  not  a  Labour 
Leader.  When  other  professors  make  practical  suggestions,  I  usually 
don't  think  much  of  them  ;  I  do  not  wish  to  join  that  band,  and  I 
am  not  going  to  be  further  drawn  on  the  matter.  In  regard  to  the  war 
debt :  several  speakers  referred  to  its  disadvantage,  and  then  one 
speaker  said  we  owed  the  money  to  ourselves,  another  speaker  regarded 
it  as  very  objectionable  and  was  prepared  to  sweep  it  all  away 
in  rather  a  drastic  fashion.  It  is  true  that  most  of  it  is  owed  to  our- 
selves (not  the  whole  of  it),  and  therefore  the  interest  on  it  would  mostly 
be  paid  to  some  among  us  ;  but  is  it  no  loss  to  the  people  in  the  country 
as  a  whole  that  they  should  have  to  raise  between  two  and  three 
hundred  millions  a  year  by  some  form  of  taxation  or  perpetual  exaction 
in  order  to  pay  it  to  other  people  in  the  country  ?  If  you  think  that  is 
no  encumbrance,  all  I  can  say  is  that  I  disagree  with  you.  It  is  not 
only  a  great  encumbrance,  but  a  great  difficulty,  and  the  whole  thing 
is  very  undesirable.  While  I  should  deprecate  any  suggestion  of  repudia- 
tion, it  is  quite  conceivable  that  some  fairly  drastic  measure  of  redemption 


59 

might  well  be  adopted,  so  as  to  get  rid  of  the  thing  quickly.  I  agree  with 
Mr.  Newlove  in  speaking  of  the  possibility  of  supposing  that  the  ties 
created  by  the  present  war  are  not  strong  enough  to  divert  the  course 
of  commerce  for  any  considerable  period  after  it.  He  said  that  Russia 
would  not  trade  with  a  distant  country  when  there  was  a  country 
(now  an  enemy)  close  at  hand,  ready  to  supply  them  with  goods.  This 
can  be  carried  a  little  further.  We  are  often  told  that  blood  is  thicker 
than  water,  but  my  impression  is  that  contiguity  is  thicker  than 
blood.  History  has  proved  that  it  is  contiguity  that  has  triumphed. 
The  national  boundaries  of  1914  have  not  always  been  in  existence ; 
they  have  continually  been  changing,  but  on  the  whole  the  areas 
under  one  flag  have  been  enlarging,  and  that  of  course  suggests  an 
answer  to  the  people  who  are  so  pessimistic  as  to  think  that  we  can 
never  get  out  of  the  present  international  situation.  As  a  matter 
of  fact,  the  areas  within  which  wars  are  conducted  have  altered  so 
much  that  we  can  reasonably  hope  wars  will  come  to  an  end  in  the  course 
of  time.  In  the  olden  times  there  were  wars  between  different  parts 
of  England ;  later,  different  parts  of  Europe  ;  and  we  may  expect 
the  areas  to  gradually  extend,  even  if  they  do  not  extend  suddenly, 
because  if  you  have  two  large  areas  comprising  the  whole  world,  there 
would  be  a  sudden  end  when  they  became  one.  It  therefore  seems 
to  me  possible  that  we  may  get  beyond  this  period  of  international 
jealousy  in  the  future  as  we  have  partially  in  the  past,  by  the  extension 
of  the  smaller  areas.  Therefore  I  think  we  are  justified  in  looking 
at  the  question  of  commercial  policy  from  the  standpoint  which  I 
tried  to  put  before  you  :  what  I  tried  to  do  was  to  suggest  that  you  must 
look  upon  it  not  from  a  petty  parochial  point  of  view,  but  from  the 
point  of  view  of  the  great  working-class  which  is  not  confined  to  one 
country  but  covers  the  world.  I  hope  to  see  your  organisations,  of 
whatever  kind  they  are,  spread  over  and  beyond  national  boundaries. 


60 
THIRD    SESSION. 


CAPITALISM    AND   INTERNATIONAL 
RELATIONS. 

By    A.    E.    ZIMMERN,    M.A. 


Some  months  ago,  before  the  United  States  entered  the  war,  a  dis- 
tinguished and  benevolent  Jewish- American  millionaire,  Mr.  Jacob 
Schiff,  was  invited  to  give  his  opinion  on  the  project  of  a  League  of 
Nations  to  prevent  future  wars.  His  reply  was  short  and  to  the  point, 
as  befits  a  successful  business  man.  "  Your  league  does  not  meet  the  diffi- 
culty :  the  root  of  the  trouble  is  economic."  As  every  sermon  must  have 
a  text,  this  utterance  by  Dives  may  serve  as  an  introduction  to  the 
subject  which  I  want  to  bring  before  you. 

How  far  are  economic  causes  at  the  root  of  the  present  war  ?  What 
is  the  connection,  if  any,  between  the  existing  economic  system  and  the 
international  antagonisms  out  of  which  the  war  has  sprung  ?  What 
exactly  is  meant  by  the  phrase  which  is  not  uncommonly  heard  that 
the  war  is  a  "  capitalist  "  war,  or,  as  the  Russian  Extremists  put  it, 
a  war  waged  by  bourgeois  governments  in  which  the  working  class 
as  such  has  no  concern  ?  And,  if  we  can  answer  these  questions, 
what  bearing  has  our  answer  on  the  problem  of  the  better  organisation 
of  international  relations  after  the  war  ? 

These  are  thorny  subjects,  which  cannot  be  disposed  of  in  a  short 
paper ;  but  so  much  confusion  of  thought  and  perplexity  of  spirit 
prevail  about  them  that  an  attempt  to  clear  the  issue  may  be  worth 
the  attention  of  a  conference  concerned  with  the  problem  of  recon- 
struction. For  we  cannot  apply  remedies  till  we  have  ascertained  the 
disease  ;  and  if  Mr.  Schiff 's  words  are  strictly  true,  some  of  the  remedies 
which  are  just  now  being  most  confidently  proposed  do  not  "  touch  the 
spot  "  at  all. 

Let  us  begin  by  defining  our  terms.  I  think  we  had  better  drop  the 
term  "  bourgeois."  It  is  a  Continental  expression  which  defies  exact 
definition,  but  I  fear  that  if  one  looked  into  it  too  closely,  a  fair  pro- 
portion of  those  present  might  have  to  plead  guilty  to  the  soft  impeach- 
ment. Do  not  some  of  us  live  in  villas,  and  do  not  most  of  us  wear 
dark  coats  and  stiff  collars  ?  But  what  is 'meant  by  a  "  capitalist "  ? 
I  suppose  it  means  someone  who  has  resources,  in  money  or  its  equi- 
valent, in  addition  to  his  natural  labour-power,  whether  of  hand  or 
brain.  A  penniless  artist  is  not  a  capitalist ;  nor  is  a  landless  agri- 
cultural labourer  ;  but  the  capitalist  class,  in  this  sense,  would  include 


61 

the  whole  body  of  people  from  the  millionaire  to  the  workman  with  a 
few  pounds  in  war  loan  or  in  the  "  Co-op."  who  have  something  "  put 
by,"  whether  in  securities  or  in  land,  or  in  a  little  business,  or  in  bricks 
and  mortar. 

I  do  not  think  anyone  can  honestly  pretend  that  this  body  of  people, 
in  this  or  any  other  country,  either  provoked  the  war  or  stand  to  derive 
any  benefit  from  its  continuance.  To  begin  with,  they  are  not  organised 
in  such  a  way  as  to  have  any  common  will  or  policy,  or  any  means  of 
enforcing  it ;  and,  in  the  second  place,  if  they  had,  they  would  certainly 
be  in  favour  of  peace,  retrenchment,  and  prosperity,  with  low  prices 
and  low  taxes,  just  as,  when  they  organise  municipally,  they  are 
invariably  in  favour  of  low  rates. 

An  able  Ameiican  Socialist  writer,  Mr  L.  B.  Boudin,  in  Socialism 
and  War*  puts  this  point  very  clearly  :  "I  know  it  is  the  fashion 
among  Socialists,"  he  writes,  "  to  assume  and  assert  that  the  burdens 
and  miseries  of  war  are  borne  wholly  by  the  working  class,  and  that 
for  the  capitalist  class  it  is  a  sort  of  picnic,  abounding  in  fun  and 
excitement,  besides  being  a  good  business.  .  .  As  to  the  present  war, 
I  must  say  the  idea  is  utterly  baseless.  This  war  is  certainly  no  picnic 
for  any  social  class.  Certainly  not  to  the  capitalist  class,  either  in  the 
Alliance  or  in  the  Entente  countries.  It  is  even  doubtful  whether  it 
is  good  business — the  destruction  of  property  is  altogether  too  great 
for  that.  As  to  the  destruction  of  life,  it  is  so  appalling  and  so  indis- 
criminate as  to  class  as  to  make  the  sacrifices  of  the  capitalist  class 
very  real  and  very  substantial." 

These  words  were  written  early  in  the  war,  but  its  prolongation  has 
only  confirmed  them.  In  another  American  publication  I  find  a  definite 
estimate  as  to  the  effect  of  the  war  upon  the  capital  values  of  the 
possessing  class:  The  New  Republic,  of  June  2,*  1917,  quotes  the 
"  British  Bankers'  Magazine"  as  saying  that  the  average  value  of 
387  representative  securities  has  declined  20  per  cent,  since  the  outbreak 
of  war.  In  other  words,  the  capitalists  who  hold  these  securities  are, 
on  the  average,  20  per  cent,  poorer  with  respect  to  them  than  on  the 
outbreak  of  war.  This  is  not  nearly  such  a  disastrous  slump,  after 
three  years  of  war,  as  Mr.  Norman  Angell  taught  us  to  expect,  but  it 
fully  bears  out  his  general  contention  that  "war  is  bad  business." 

This  war,  then,  is  certainly  not  in  the  interests  of  the  capitalist 
class  in  general ;  and  I  think  the  same  can  be  said  of  any  war  or  scare 
of  war  which  either  causes  a  slump  in  capital  values  or  involves  govern- 
ments in  large  expenditure  on  armaments  and  mobilisation. 

But,  it  will  be  said,  there  are  sections  of  the  capitalist  class  which 
have  benefited,  and  benefited  greatly,  by  the  war.  Undoubtedly  this 
is  true  :  the  figures  of  the  Excess  Profits  Tax  returns  reveal  it  for  all 
to  see.  Large  numbers  of  traders  and  manufacturers  have  taken 
advantage  of  the  temporary  scarcity  of  something  which  they  had  to 

*  New  York  :  New  Review  Publishing  Association,  1916,  p.  32.     The  lectures 
reprinted  in  it  were  delivered  in  the  first  winter  of  the  war. 


62 

sell,  whether  it  be  cargo-space  or  wooden  huts,  or  potatoes,  or  various 
kinds  of  munitions  and  equipment,  and  have  exacted  their  pound  of 
flesh  from  the  purchaser  according  to  the  recognised  rules  of  the 
commercial  game.  The  war  has  undoubtedly  brought  about  a  great 
transference  of  wealth  among  the  property-owning  and  investing  class, 
not  only  in  this  country,  but  in  all  countries,  belligerent  and  neutral 
alike-.  Most  capitalists  are  considerably  poorer,  some  are  much  richer, 
and  some  people  who  were  not  capitalists  at  all  have  recently  become 
so .  A  correspondent  in  Italy  writes  to  me,  in  words  which  have  a  f  amiliar 
ring  :  "  Here,  too,  there  is  a  great  deal  of  profiteering,  and  all  sorts 
of  common  people  are  getting  rich,  and  even  say  '  Long  live  the  war ' "  ; 
whilst  a  very  well-informed  neutral  with  whom  I  recently  had  a  talk 
declared  that  if  the  war  led  to  social  upheavals,  as  he  considered  very 
likely,  they  would  most  likely  break  out  first  in  the  neutral  countries, 
where  the  intense  class-bitterness  aroused  by  the  working  of  the 
capitalist  system  under  the  present  abnormal  conditions  is  not  held  in 
check  by  any  of  the  influences  which  may  make  for  national  unity  in 
the  belligerent  countries. 

That  any  one  at  all  should  become  richer  or  more  comfortable  at 
a  time  when  hundreds  of  thousands  of  his  fellow  men  are  making  the 
supreme  sacrifice  has  struck  public  opinion  in  all  countries  as  incon- 
gruous, and  indeed  deplorable.  It  illustrates  in  a  flash  the  measure 
of  the  difference  between  the  appeal  of  duty  and  the  appeal  of  self- 
interest — a  difference  of  which  we  were  all  dimly  aware  in  pre-war 
days,  but  which  it  has  taken  the  experience  of  the  war  to  burn  in  upon 
our  minds.  But  it  would,  nevertheless,  be  very  difficult  to  prove  that 
all  or  any  section  of  those  who  have  improved  their  material  position 
as  a  result  of  the  war  either  helped  to  bring  the  war  about,  or  even 
desired  it.  Many'  of  them  have  suffered  personal  losses  which  they 
would  have  given  their  new-gotten  wealth  many  times  over  to  escape  ; 
and  of  the  great  majority  I  think  it  may  be  said  with  truth  that  they 
made  money  because  they  could  hardly  avoid  it.  Merchants  and 
manufacturers,  like  most  Englishmen,  are  very  conservative  in  their 
habits,  especially  when  they  are  getting  on  in  years.  When  such  a  man 
has  been  accustomed  all  his  life  to  working  along  certain  lines,  he  cannot 
easily  adapt  himself  to  new  standards.  Mr.  Runciman,  for  instance, 
is  reputed  to  be  a  man  of  unusual  ability,  yet  he  saw  nothing  to  be 
ashamed  at  in  saying  from  his  place  in  the  House  of  Commons,  when 
he  was  President  of  the  Board  of  Trade,  that  it  was  more  than  one 
could  expect  of  human  nature  for  a  coalowner  not  to  exact  the  highest 
possible  price  for  his  coal.*  Mr.  Runciman  has  not  even  the  saving 
grace  of  being  elderly,  and  he  has  had  an  experience  of  public  life  which 


*Mr.  Runcitnan's  words  were:  "The  coalowners  are  pretty  shrewd  business 
men,  and  if  they  find  offers  coming  along  week  by  week  at  increased 
prices,  it  is  more  than  one  can  expect  of  human  nature  that  they  should 
refuse  these  offers  made  to  them."  In  reply  to  an  interruption  he  added  : 
"  All  business  men  are  anxious  to  get  the  largest  amount  they  can  for 
what  thev  have  to  sell/' — House  of  Commons  debates,  July  1W,  1915. 


63 

might  have  made  him  familiar  with  other  standards,  if  a  Liberal 
Cabinet  Minister  speaks  and  thinks  in  this  way,  it  may  be  presumed 
that  thousands  of  ordinary  people  who  live  according  to  habit,  without 
trying  to  put  their  policy  into  words,  are  acting  along  the  lines  he 
indicated.  Their  actions  may  set  a  deplorable  and  demoralising 
example  ;  but  they  are  not  necessarily  bad  people.  They  are  only 
the  victims  of  habit — the  followers  of  a  vicious  tradition.  It  is 
true  that  they  might  have  risen  superior  to  the  tradition,  as  many 
of  them  have  done  ;  but  if  we  look  at  the  matter  in  the  broadest 
light  and  judge  them  as  we  should  desire  to  be  judged  ourselves,  we 
must  conclude  that  it  is  not  they  who  are  at  fault,  but  the  system  in 
which  they  are  working — the  system  which  has  made  it  second  nature 
for  them  to  make  the  highest  possible  profit  on  a  commercial  transaction. 

But,  I  shall  be  told,  to  say  that  the  individual  capitalist  is  the  victim 
of  a  bad  system  does  not  prove  that  the  war  is  not  a  "  capitalist  war." 
In  fact,  it  is  rather  an  argument  the  other  way.  This  or  that  capitalist, 
or  group  of  capitalists,  may  not  have  brought  about  or  desired  the  war. 
The  American  Socialist  editor  who,  in  August,  1914,  explained  what 
was  going  on  in  Europe  as  "  a  frame-up  by  Eothschild  "  may  have  been 
somewhat  out  of  his  depth  ;  we  may  grant  that  Sir  John  Jackson, 
or  Sir  William  Beardmore,  or  Sir  Thomas  Lipton,  or  Sir  Walter  Kunci- 
man,  who  are  alleged  to  have  made  money  out  of  the  war — with 
what  justice  Somerset  House,  I  hope,  knows  better  than  I  do — had 
nothing  whatever  to  do  with  the  "  ten  years  of  secret  diplomacy  " 
which  preceded  the  outbreak  of  hostilities  ;  but  was  not  the  capitalist 
system  itself  the  canker  at  the  root  of  our  civilisation  which  is  responsible 
for  its  sudden  collapse  ?  Is  it  not,  to  say  the  least,  profoundly  dis- 
quieting that  a  crisis  in  the  nation's  history  should  reveal  so  profound 
a  discrepancy  between  the  spirit  of  national  service  which  animates 
its  soldiers  and  sailors  and  the  motive  of  profit  by  which  its  merchants 
and  manufacturers  are  expected,  almost  as  a  matter  of  course,  to  be 
actuated  ?  If  war  brings  out  so  much  unselfish  heroism  among  the 
fighting  men,  and  so  much  selfish  greed  among  the  business  men, 
is  not  the  spirit  of  business — the  spirit  which  animates  the  existing 
economic  order — an  even  greater  enemy  to  human  progress  than  the 
menace  of  German  domination  against  which  we  are  contending  ? 
Is  not  the  real  enemy,  perhaps,  not  the  spirit  of  militarism,  as  embodied 
in  the  Kaiser's  armies,  but  the  spirit  of  profiteering  as  embodied  in 
the  normal  life  of  all  the  contending  parties  ?  If  we  want  to  secure 
a  truly  just  and  stable  peace,  had  we  not  better  follow  Mr.  Schiff  s 
advice  and  look  beyond  the  League  of  Nations,  with  its  machinery — 
so  familiar  to  workmen  from  its  operation  in  other  spheres — for  the 
upholding  of  public  right  and  the  enforcement  of  international  agree- 
ments ?  Will  it  not  be  quicker,  in  the  long  run,  to  touch  the  evil  at 
its  source,  and  abolish  an  economic  system  which  is  admittedly  on  a 
lower  plane  than  the  majority  of  those  who  are  enmeshed  in  its  toils  ? 

Three  years  ago  I  should  have  answered  these  questions  with  an 
emphatic  "  No  ! " — not  because  I  did  not  desire  to  see  extensive 


64 

changes  in  the  existing  economic  system,  but  because  I  believed  in 
doing  one  job  at  a  time  and  doing  it  thoroughly.  War  may 
or  may  not  be  the  most  dangerous  and  deep-rooted  disease  of 
modern  civilisation,  but  it  is  certainly  the  most  absorbing  in  its  claim 
on  the  attention  and  the  energies  of  peoples.  It  demands  stern,  con- 
tinuous, and  undivided  concentration.  And  as  I  believed,  and  believe 
still,  that  the  decisive  defeat  of  German  militarism  is  indispensable  to  the 
future  progress  and  happiness  of  the  peoples  of  Europe,  I  was  inclined 
to  lay  aside  speculations  as  to  the  reform  of  our  industrial  system  till 
"  after  the  war."  There  were  many  who  thought  with  me  on  the  same 
lines,  who,  as  one  soldier  put  it,  went  out  to  France  to  finish  the  work 
of  the  French  Revolution  in  Europe,  meaning  to  come  back  to  help  on 
the  social  revolution  at  home. 

But  as  love  laughs  at  locksmiths,  so  the  course  of  events 
stultifies  the  speculations  of  ^students.  In  thinking  we  could 
thus  separate  the  two  great  problems  which  rack  the  peoples 
of  Europe,  we  were  wrong.  Students  and  statesmen  cannot  choose 
the  order  in  which  great  and  long-standing  issues  will  allow  themselves 
to  be  dealt  with,  and  to  expect  the  problems  created  by  the  Industrial 
Revolution  to  be  frozen  into  immobility  while  Europe  devoted  itself 
with  a  single  mind  to  solving  those  created  by  the  French  Revolution 
was  to  demand  a  second  miracle  of  Joshua — to  ask  the  sun,  which  rises 
afresh  every  morning  above  the  smoke-cloud  of  our  industrial  centres, 
to  stand  still  in  its  course.  Capitalism  did  not  cause  the  war,  it  is 
true  ;  it  was  the  Kaiser,  not  Rothschild,  who  pulled  the  trigger  ;  but 
capitalism  and  the  philosophy  of  self-interest  on  which  it  reposes 
were  intimately  connected  with  the  atmosphere  of  selfishness  and 
domination  which  made  the  war  possible.  The  two  sets  of  causes, 
political  and  economic,  lay  smouldering  together  beneath  the  crust 
of  European  society.  When  one  erupted,  it  should  have  been  possible 
to  foresee  that  it  would  bring  the  other  with  it  to  the  surface. 

But  perhaps  not  even  the  most  clear-sighted  observer  of  the 
problems  of  modern  society  could  have  predicted  the  closeness 
of  the  relationship  which  the  course  of  the  military  operations 
would  establish  between  political  and  economic  issues  and  forces. 
Blinded  by  precedent,  statesmen  and  economists  alike  thought 
of  war  in  terms  of  armies ;  or,  if  they  saw  a  little  further, 
of  finance.  A  few  months  of  war,  waged  on  a  modern  scale, 
showed  that  victory  depended  neither  on  courage  in  the  field, 
nor  on  gold  and  credit,  but  on  industrial  power.  The  struggle  was 
transferred,  or  rather  extended,  from  the  trenches  to  the  workshop 
and  the  shipyard ;  and  the  clash  of  the  fighting  men  became  a  mere 
section  of  a  vaster  conflict  between  the  entire  working  force  of  the  con- 
tending peoples.  Thus  the  problems  connected  with  the  working  of 
the  economic  system,  instead  of  lying  dormant  "  for  the  duration  of 
the  war,"  were  everywhere  discussed  and  considered  afresh,  not  only 
by  the  workers  but  by  Governments,  and  all  over  Europe  able  admini- 
strative brains  began  to  consider  them  from  a  standpoint  which  had 


65 

never  before,  in  this  country  at  any  rate,  been  adopted  in  public  policy — 
the  standpoint  not  of  profit  but  of  use — how  best  to  enable  our  indus- 
tries to  supply  the  immediate  and  pressing  needs  of  the  community. 

After  three  years  of  destruction  the  interrelation  of  the  two  sets 
of  problems — the  political  and  the  economic — has  become  more 
intimate  than  ever.  The  British  and  German  blockades  which 
threaten  to  denude  both  countries — happily  not  in  equal  degree 
— of  their  stock  of  raw  material  and  imported  foodstuffs, 
together  with  the  withdrawal  of  labour  from  peace-time  activities 
over  a  large  part  of  the  world,  are  bringing  statesmen  face 
to  face  with  a  situation  in  which  all  the  old  landmarks  of  capitalist 
economics  and  fiscal  controversy  are  submerged.  The  end  of  the 
war  will  find  Europe — especially  Central  Europe — poor,  exhausted, 
and  largely  deprived  of  its  means  of  support  and  supply.  As  a  recent 
writer  puts  it,  in  an  article  bearing  the  ominous  title  'A  World  Famine  ' : 
4  Unless  some  very  drastic  and  very  far-reaching  measures  are  taken 
in  time,  and  taken  on  a  sufficiently  large  scale,  there  will  be  many 
millions  of  families  in  parts  of  Europe  and  South-Eastern  Asia  without 
employment  and  without  means  to  buy  the  scanty  supplies  of  extremely 
dear  food  that  will  be  locally  accessible  to  them.  ...  It  is  not 
too  much  to  say  that  there  will  be  places  within  a  day's  journey  of 
European  capitals  where  society,  with  an  extremity  of  want  not 
paralleled  in  Europe  since  the  Thirty  Years'  War,  may  be  near  dis- 
solution.'* Already  we  can  see  that  among  the  questions  with  which 
the  Peace  Congress  will  have  to  deal  will  not  only  be  the  establishment 
of  public  right  and  the  redrawing  of  the  map  of  Europe,  but  the  more 
urgent  problem  of  how  to  provide  food,  clothing,  and  other  necessaries 
to  the  distressed  peoples  of  Europe,  a  task  which  the  existing  economic 
system  has  not  performed  with  conspicuous  success  in  peace  time, 
and  is  certainly  not  qualified  to  cope  with  in  the  unprecedented  con- 
ditions of  the  immediate  post-war  period. 

So  far  from  setting  back  industrial  change,  then,  the  war  has  brought 
it  in  its  stride  ;  and  the  discussion  of  economic  problems  is  not  only 
not  irrelevant  to  the  problems  of  the  war  and  the  settlement,  but  is 
vitally  bound  up  with  them.  The  war  has  shown  that  modern  life  is 
all  of  one  piece  :  that  its  separate  problems  cannot  be  isolated  and  taken 
one  at  a  time  for  special  treatment ;  and  that  when  statesmen  inscribe 
liberty  and  justice  on  their  banners  and  bid  their  fellow  citizens  die  for 
them,  they  are  stirring  up  feelings  and  drawing  attention  to  contrasts 
for  which,  sooner  or  later,  they  are  certain  to  be  called  to  account. 

Now  perhaps  we  are  in  a  position  to  sum  up  this  rather  abstract 
discussion  as  to  the  relation  between  capitalism  and  the  war.  To  those 
who  say  :  "  Leave  the  economic  issue  aside  and  concentrate  all  on 
winning  the  war,"  the  answer  is  :  The  war  itself  will  not  allow  us  to 
leave  the  economic  issue  aside  ;  and,  that  being  so,  winning  the  war 
necessarily  takes  on  a  wider  significance.  It  means  the  triumph  of 
liberty  and  justice,  not  only  on  the  battlefield  but  at  home  :  the 

*Netv  Statesman,  August  25th,  1917. 


66 

extension  to  the  economic  sphere  of  the  principles  which  the  Allies 
have  proclaimed  in  the  political,  it  means  accepting  Mr.  Schiff's 
challenge,  and  grappling  with  the  deep-seated  industrial  problem 
which,  if  not,  as  Mr.  Schiff  declares,  the  root  of  the  trouble,  is  certainly 
one  of  its  twin  roots.  To  the  smaller  group  on  the  other  hand  who  say  : 
"  Leave  the  war  to  take  its  own  course  and  concentrate  all  on  abolishing 
the  existing  economic  order,"  the  answer  is  :  You  are  no  more  free 
than  the  politicians  to  select  one  problem  for  treatment  and  ignore  the 
rest.  You  may  ignore  the  war,  but  the  war  will  not  ignore  you. 
Moreover,  the  existing  economic  order  which  you  are  out  to  "  abolish," 
is  in  process  of  transformation  before  your  eyes.  Much  better  watch 
what  is  happening  and  try  to  learn  from  it,  rather  than  stand  aside 
and  denounce  profiteering  whilst  you  allow  militarism  to  take  its  course. 
How  can  the  ideals  of  the  Allies  be  applied  to  our  industrial  system 
at  home  ?  To  attempt  an  answer  to  this  question  lies  beyond  the 
scope  of  this  paper.  I  will  only  say  this  :  that  the  war  has  effectually 
disposed  of  the  idea  that  a  simple  and  sufficient  remedy  for  our  indus- 
trial ills  is  to  be  found  in  abolishing  the  system  of  privately  owned 
enterprise  and  replacing  it  by  a  system  of  State  ownership.  The  war 
has  certainly  dealt  a  heavy  blow  at  the  capitalist  system  :  the  system 
which  relied  on  the  self-interest  of  competing  producers  and  middlemen 
to  supply  the  needs  of  the  community.  But  the  State,  which  has  been 
enthroned  in  their  stead,  has  not  proved  itself  able  unaided  to  organise 
our  industrial  life  on  a  better  basis.  State  officials  are  not  actuated, 
it  is  true,  by  motives  of  pecuniary  gain ;  but  humanity  has  other 
failings  besides  those  which  used  to  be  attributed  as  virtues  to  "  the 
economic  man,"  and  some  of  these  can  put  grit  into  the  machine 
quite  as  effectually  as  the  greed  of  the  most  thoroughgoing  capitalist. 
The  war  has,  in  fact,  modified,  if  not  transformed,  the  attitude  of 
British  Socialists  towards  bureaucracy ;  and  I  suspect  that,  when  the 
curtain  is  lifted,  we  shall  find  the  same  to  be  the  case  on  the  Continent. 
The  result  of  the  intervention  of  the  State  has  been  not  altogether 
unlike  what  happens  when  a  bystander  interferes  in  a  street  brawl 
between  a  drunken  couple.  Workmen  and  employers  have  discovered 
that  their  familiarity  with  their  own  trade  and  their  long  association 
together,  even  on  cat  and  dog  lines,  have  given  them  a  certain  common 
stock  of  sympathy  as  against  an  intruder  from  outside.  The  intruder, 
on  the  other  hand,  is  beginning  to  wonder  whether  he  has  not  shown 
a  certain  want  of  tact  in  his  interference.  The  resulting  situation  may 
be  judged  from  the  nature  of  the  proposals  put  forward  with  official 
sanction  in  the  Whitley  Keport,  and  from  the  favourable  reception 
accorded  to  them.  Between  State  Socialism  and  private  capitalism 
we  have  discovered  that  there  is  an  intermediate  region  :  industrial 
self-government.  The  association  of  the  two  parties  who  understand 
their  own  business,  in  an  equal  partnership,  in  a  common  service, 
will  itself  go  far  to  redeem  the  organised  industries  from  the  domination 
of  pecuniary  motives.  There  is  no  space  to  pursue  this  line  of  thought 
further.  Moreover,  many  of  those  present,  who  know  the  working  of 


67 

some  of  the  Boards  of  Control  already  set  up  for  certain  industries, 
can  speak  with  more  knowledge  than  an  outsider.  But  if,  when  war- 
time pressure  is  removed  and  the  State  has  once  more  retired  to  a  dis- 
creet distance,  the  self-governing  institutions — national,  local,  and  in 
the  workshop — which  are  now  being  officially  advocated  become  a 
living  reality,  it  will  be  true  to  say  that  one  of  the  results  of  the  war 
has  been  to  promote  our  declared  national  aims  of  justice  and  liberty 
among  important  sections  of  our  own  people. 

But  the  most  urgent  economic  task  which  the  settlement  will  impose 
will  not  be  domestic,  but  international :  it  will  be  concerned,  as  we  have 
already  suggested,  with  the  securing  of  supplies  upon  which  the 
recuperation  of  the  peoples,  and,  more  especially,  of  the  industrial 
peoples,  depends.  How  can  this  problem  best  be  dealt  with  ? 
It  is  worth  while  trying  to  answer  this  question ;  for  upon 
its  successful  solution  in  the  months  following  the  signing  of  peace 
the  international  "atmosphere"  of  the  post-war  period  will  very 
largely  depend. 

Private  capitalism,  as  we  have  seen,  must  prove  unequal  to  the 
task.  Nor  will  "  industrial  self-government  "  help  us  ;  for  we  are 
dealing  with  what  is  essentially  a  problem  of  foreign  trade  and  foreign 
policy.  The  responsibility  for  supplying  the  needs  of  their  exhausted 
populations  must,  in  one  form  or  another,  be  borne  by  the  various 
Governments. 

What  form  should  this  action  take  ?  The  natural  course  might  seem 
to  be  for  the  various  Governments  concerned  to  deal  with  the  matter 
themselves  ;  and,  in  point  of  fact,  enough  is  known  for  the  conjecture 
to  be  hazarded  that  every  Government  in  Europe,  belligerents  and 
neutrals  alike,  is  already  setting  on  foot  an  official  organisation  to  deal 
with  the  problem  of  post-war  supplies .  Self-preservation  alone  demands 
it.  No  belligerent  Government  dare  demobilise  its  armies  till  it  can 
provide  employment  for  its  workers ;  and  employment  depends  in 
its  turn  upon  industrial  raw  material,  and  raw  material  upon  shipping. 
There  is  therefore  urgent  need  for  all  the  governments  to  organise  what 
resources  they  can  lay  their  hands  on  with  at  least  the  same  thorough- 
ness as  they  have  devoted  to  the  business  of  mobilisation  or  making 
war.  In  spite  of  the  perilous  uncertainty  of  many  of  the  factors 
involved,  dependant  as  they  are  on  the  terms  of  peace,  Government 
"  Reconstruction  Departments  "  are  probably  everywhere  at  work  on 
the  twin  problems  of  demobilisation  and  supplies. 

But,  here  again,  can  we  rely  upon  the  replacement  of  private  capital- 
ism by  State  action  to  solve  the  problem  satisfactorily  ?  The  individual 
officials  acting  on  behalf  of  the  various  Governments  may  not  be 
"  profiteers,"  but  what  assurance  is  there  that  the  Governments 
for  whom  they  will  be  acting  will  not  be  actuated  by  motives  at  least 
as  unworthy  as  those  of  the  capitalist  ?  Is  competition  between 
Government  and  Government,  whether  for  wealth  or  for  territory 
or  for  power,  any  less  dangerous  to  the  world's  welfare  than  the  com- 
petition between  trader  and  trader  or  syndicate  and  syndicate  ? 


68 

Is  it  not,  in  fact,  far  more  dangerous,  owing  to  the  far  greater  concentra- 
tion of  power  in  the  hands  of  the  Governments  that  are  competing  and, 
owing  to  the  whole  armoury  of  weapons,  military,  and  diplomatic  as 
well  as  commercial,  which  they  can  bring  to  bear  on  the  attainment 
of  their  purposes  ?  Is  not,  indeed,  the  association  between  Govern- 
ments and  economic  enterprises  one  of  the  most  sinister  features  of 
the  diplomatic  history  of  the  years  before  the  war  ?  In  so  far  as  the 
war  was  the  product  of  the  capitalist  spirit,  was  it  not  the  economic 
projects  and  ambitions  of  Governments  rather  than  of  individual 
capitalists  which  brought  it  about  ?  In  Morocco,  for  instance,  though 
the  private  firm  of  Mannesmann  Brothers  had  something  to  do  with 
the  international  troubles  that  arose,  could  Mannesmann  Brothers 
by  themselves  have  created  an  international  crisis  or  brought  about 
a  European  war  ?  It  is  said  that  certain  American  interests  in  Mexico 
have  tried  on  numerous  occasions  to  involve  the  United  States  in  war 
with  Mexico.  They  have  hitherto  failed,  owing  to  the  attitude  of  the 
United  States  Government.  Similarly  neither  in  Morocco  nor  in  Persia 
nor  in  Turkey  nor  in  China  would  the  penetration  of  European  capitalists 
have  been  a  contributory  cause  of  the  present  war  had  not  the  govern- 
ments taken  up  their  stand  behind  the  private  trading  interests  and 
associated  themselves  and  their  prestige  with  their  enterprises.  Left 
to  themselves,  capitalists  may  be  selfish  and  grasping  ;  but  they 
cannot  bring  about  war,  for  they  do  not  wield  the  power  of  the  State. 
It  is  for  this  reason  that  private  capitalism,  so  far  from  being  recog- 
nised as  a  war-making  force,  was  for  many  years  regarded,  and  is  still 
regarded  in  many  quarters,  as  pre-eminently  pacific  in  its  influence  on 
international  relations.  Cobden,  for  instance,  was  a  capitalist  to  the 
backbone  ;  no  man  in  his  day  held  a  firmer  belief  in  the  virtues  of 
the  existing  economic  order.  But  he  was  also  a  staunch  and  livelong 
advocate  of  peace  at  a  time  when  pacifism  was  a  far  less  popular 
creed  than  now.  And  he  was  an  advocate  of  peace  because  he  was  a 
man  of  business  :  his  pacifism  and  his  internationalism  sprang  directly 
out  of  his  belief  in  the  harmonious  and  satisfactory  working  of  the 
capitalist  system.  Just  as  he  believed  in  unrestricted  private  enterprise 
at  home  and  resented  the  interference  of  the  State  with  the  natural 
working  of  economic  laws,  so  he  believed  in  the  mission  of  the  private 
trader,  unassisted  and  unhampered  by  his  own  or  other  governments, 
to  spread  prosperity  and  harmony  throughout  the  world.  Hands  off, 
Governments  !  was  his  perpetual  cry  ;  leave  international  politics 
to  the  private  trader,  and  he  will  keep  you  clear  of  war.  What  he 
dreaded  above  all  else,  and  surely,  as  the  event  has  shown,  not  without 
reason,  was  the  concentration  of  political  and  economic  power  in  the 
same  hands — the  hands,  moreover,  which  hold  in  their  keeping  the 
keys  of  war  and  peace.  As  the  motto  of  his  earliest  political  writing 
he  adopted  a  famous  sentence  from  Washington's  farewell  address  to 
the  American  people  :  "  The  great  rule  of  conduct  for  us  in  regard 
to  foreign  nations  is,  in  extending  our  commercial  relations,  to  have 
with  them  as  little  political  connection  as  possible."  To  the  spirit  of 


69 

that  motto  Cobden  remained  true  all  his  life.  Like  Mr.  Schiff,  he 
doubted  the  value  of  international  political  machinery.  He  did  not 
wish  to  see  any  sanction  provided  for  international  agreements  or  to 
see  his  own  country  involved  in  the  quarrels  of  other  nations.  "  Non- 
intervention "  was  his  motto.  Let  each  country  keep  to  itself  and 
keep  its  own  peace.  In  case  of  quarrel,  he  favoured  settlement  by 
arbitration  ;  but  far  better  avoid  a  quarrel,  if  possible,  by  maintaining 
a  placid  and  dignified  isolation.  Much  the  same  view  is  held — or  was 
held  up  to  the  eve  of  the  war — by  his  latter-day  successors,  Mr.  Norman 
Angell  and  his  group.  They  sought  to  divert  men's  minds  from  thoughts 
of  war  by  taking  the  businesslike  attitude  that  war  does  not  pay. 
They  appealed  to  reason  against  passion,  to  self-interest  against 
patriotism,  to  solid  considerations  of  profit  against  romantic  dreams 
of  national  greatness. 

Alas  !  it  is  proved  to  demonstration  that  war  does  not  pay  ;  but  the 
deduction  which  Cobden  and  Norman  Angell  drew  from  that  fact — 
namely,  that  Governments  should  go  on  governing  and  leave  trading 
to  the  traders,  has  been  falsified  once  and  for  all.  The  war  has  shown 
that  you  cannot  draw  a  sharp  line  between  "  government  "  and 
"  politics  "  on  the  one  hand,  and  "  trade  "  on  the  other.  That  indeed 
might  seem  to  be  the  moral,  not  simply  of  the  war,  but  of  the  history 
of  the  commercial  and  colonial  policy  of  the  Great  Powers  during  the 
half -century  between  Cobden's  French  Treaty  and  to-day.  Considera- 
tions arising  out  of  foreign  trade,  questions  of  fiscal  policy  at  home 
and  in  overseas  dependencies,  cannot  be  kept  out  of  the  political  arena. 
They  do  not  simply  concern  the  livelihood  of  traders.  They  vitally 
affect  the  life  of  nations.  The  same  is  true  of  the  many  commercial 
questions  which  the  war  has  shown  us  to  be  bound  up  with  the  problem 
of  national  defence.  The  true  moral  to  be  drawn  from  the  fact  that 
war  is  bad  business  is  not  that  governments  should  eschew  business 
for  fear  of  burning  their  fingers  at  it,  but  that  governments  should  go 
into  business  in  a  spirit  calculated  to  maintain  the  world's  peace. 
This  is  equally  true  whether  the  "  business  "  in  question  consists  in 
devising  a  tariff  or  negotiating  a  commercial  treaty,  or  subsidising 
a  "  key  industry,"  or  in  actual  commercial  transactions  in  the  world's 
markets. 

What  is  the  bearing  of  all  this  on  the  immediate  question  at  issue- 
that  of  post-war  supplies  ?  It  is  that  the  war  will  have  been  fought 
in  vain  if  it  finds  the  various  governments,  in  their  mutual  business 
relations,  actuated  by  the  same  grasping  and  anti-social  spirit  as  too 
often  characterised  their  pre-war  commercial  activities.  If  the  problem 
is  left  to  be  solved  on  competitive  lines,  with  the  governments  outbidding 
one  another,  there  will  be  a  scrambling  and  pushing,  and  threatening, 
and  bullying  such  as  the  world  has  never  seen  before,  and  the  League 
of  Nations  will  perish  in  its  cradle  amid  the  wrangles  of  the  rival 
disputants.  The  problem  is  one  that  can  only  be  handled  successfully 
on  co-operative  lines,  both  in  the  interests  of  the  world  as  a  whole 
and  of  the  populations  concerned.  And  once  it  is  realised  that  co- 


70 

operation  between  the  various  governments  is  the  only  policy  compatible 
with  a  tolerable  state  of  international  relations  after  the  war,  it  will 
not  take  long  to  draw  the  further  conclusion  that  the  wisest  course 
would  be  to  set  the  whole  matter  on  an  international  basis  ;  in  other 
words,  for  the  various  governments  to  delegate  powers  to  purchase, 
allocate,  and  convey  supplies  on  their  behalf  to  an  international 
Commission.  Such  a  Commission  would  then,  in  effect,  become  a 
Relief  Commission  for  the  world  as  a  whole,  similar  to  the  Commission 
which  looked  after  the  needs  of  Belgium,  under  American  guidance 
during  the  earlier  period  of  the  war. 

This  suggestion  has  already  found  a  place  in  the  Labour  Party 
draft  peace  terms  submitted  to  the  Inter- Ally  Socialist  Conference.* 
I  will  not  therefore  waste  words  on  advocating  it.  On  abstract  grounds 
it  is  sure  to  commend  itself  to  many.  It  seemed  better  to  emphasise 
the  nature  of  the  alternative  policy  with  which  Europe  would  be 
faced  if  it  were  not  adopted  ;  to  draw  attention  to  the  effects  of  an 
orgy  of  competitive  bargaining  by  governments,  some  of  them,  in- 
cluding the  smaller  neutrals,  in  desperate  case,  upon  the  prospects  of 
the  incipient  League  of  Nations.  However  impracticable  the  proposal 
seems,  it  is  worth  while  trying  to  make  it  practicable,  for  the  sake  of 
what  it  will  avoid. 

But  the  proposal  is  not  inherently  impracticable.  If  the  machinery 
had  to  be  created  de  novo  within  a  few  weeks  or  months,  its  world- wide 
scope  might  well' prove  beyond  the  powers  of  human  organisation. 
But  in  fact  the  machinery  is  already  there  ready  to  hand :  it 
exists  in  the  shape  of  the  blockade,  and  the  Inter- Ally  economic  control 
which  has  been  established  in  connection  with  it.  The  blockade, 
which  was  first  established  to  keep  goods  out  of  Central  Europe, 
slowly  developed,  through  the  pressure  of  events,  into  an  organisation 
for  allocating  shipping  and  supplies  to  the  different  countries  and  ser- 
vices. The  rationing  of  imports  will  not  need  to  begin  after  the  war. 
The  Allies  and  neutrals  are  already  living  under  a  regime  of  rationing. 
All  that  will  be  required  will  be  to  adjust  the  form  and  scope  of  the 
organisation  to  meet  the  needs  of  the  post-war  situation.  It  is 
impossible  to  predict  what  changes  will  be  needed  in  this  direction 
till  we  know  the  conditions  at  the  end  of  the  war  ;  nor  is  it  profitable 

*For  convenience  of  reference  the  recommendation  in  question  is  subjoined  : 
"That  in  view  of  the  probable  world- wide  shortage,  after  the  war,  of 
exportable  foodstuffs  and  raw  materials,  and  of  merchant  shipping,  it  is 
imperative,  in  order  to  prevent  the  most  serious  hardship,  and  even 
possible  famine,  in  one  country  or  another,  that  systematic  arrangements 
should  be  made  on  an  international  basis  for  the  allocation  and  conveyance 
of  the  available  exportable  surpluses  of  these  commodities  to  the  different 
countries  in  proportion,  not  to  their  purchasing  powers  but  to  their  several 
pressing  needs  ;  and  that,  within  each  country,  the  Government  must  for 
some  time  maintain  its  control  of  the  most  indispensable  commodities,  in 
order  to  secure  their  appropriation,  not  in  a  competitive  market  mainly  to 
the  richer  classes  in  proportion  to  their  means,  but  systematically,  to  meet 
the  most  urgent  needs  of  the  whole  community  on  the  principle  of  '  no 
cake  for  any  one  till  all  have  bread.'  " 


71 

to  speculate  on  the  treatment  to  be  meted  out,  under  such  an  arrange- 
ment, to  the  Central  Powers.  But  the  embargo  recently  proclaimed 
by  President  Wilson  on  American  exports  to  neutral  countries  and  the 
extensive  powers  granted  to  Mr.  Hoover  as  Controller  of  American 
food  supplies  indicate  that  the  United  States  Government  has  a  clear 
vision  of  the  part  which  the  supply  question  must  play  both  during 
the  closing  phase  of  the  war  and  in  the  period  of  reconstruction. 
President  Wilson  is  not  only  the  controlling  mind  in  one  of  the  largest 
producing  areas  in  the  world,  but  he  is  also  the  leading  exponent 
of  the  idea  of  the  League  of  Nations.  It  is  therefore  not  unreasonable 
to  expect  that  the  initiative  in  the  matter  of  the  international  control 
of  post-war  supplies  will  come  from  Washington. 

There  is  no  space  to  carry  the  suggestion  further.  One  other 
observation  may.  however,  be  made.  One  of  the  chief  tasks  of  the 
Relief  Commission,  on  which  the  Labour  Party  Memorandum  lays 
stress,  would  be  to  determine  the  order  in  which  commodities 
should  be  imported.  It  would  have  to  decide  which  were  the 
more  and  which  the  less  important  imports.  On  what  principle 
would  this  be  decided  ?  In  ordinary  times,  under  the  regime 
of  private  enterprise,  it  is  decided  by  "  demand."  If  more  people 
are  prepared  to  pay  for  pianos  than  for  boots,  more  pianos  will  be 
imported  than  boots,  though  a  piano  is  a  luxury  and  there  may  be  many 
thousands  of  people  who  badly  need  boots.  But  the  Relief  Commission 
would  make  its  decision  not  according  to  individual  demand,  but 
according  to  social  need — to  each  nation  "according  to  its  needs. " 
That  is  the  purpose  for  which  it  would  be  appointed.  For 
some  time  after  the  war,  at  any  rate,  necessaries  will  take  pre- 
cedence over  luxuries  ;  and  it  is  to  be  hoped  that  even  after 
the  control  of  imports  has  been  relaxed,  the  object  lesson  in  social 
economics  provided  by  the  working  of  the  Commission's  "  priority 
scheme  "  may  diffuse  saner  and  healthier  views  about  spending  among 
the  consuming  public  than  prevailed  before  the  war.  "  No  cake  until 
all  have  bread  "  is  a  sound  maxim  of  social  policy  against  which  the 
existing  economic  system  constantly  offends.  The  remedy  lies  partly 
with  governments,  but  partly  also,  as  the  war  has  revealed  to  us, 
with  the  conscience  of  the  consuming  public. 

One  more  suggestion  in  conclusion  :  The  organisation  proposed 
above  could  not,  from  the  nature  of  the  case,  last  very  long.  Under 
the  best  of  conditions  it  would  not  be  popular,  and  it  will  need  all 
the  support  of  educated  opinion  in  the  countries  affected  if  it  is  to 
carry  through  its  task  without  discredit  to  the  prestige  of  international 
organisation.  There  are,  however,  other  more  permanent  pieces 
of  work  waiting  to  be  done  if  the  connection  between  international 
organisation  and  economic  policy  is  to  be  maintained  and  the 
world  saved  from  relapsing  either  into  the  laissez-faire  capitalism 
advocated  by  Cobden  or  the  anti-social  inter-state  competition 
which  characterised  the  generation  preceding  the  war.  If  the 
League  of  Nations  comes  into  being,  it  would  be  wise  to  bear 


72 

Mr.  Schiff's  criticism  in  mind  and  extend  its  purview  to  the  economic 
questions  which  have  been  the  cause  of  so  much  international  friction. 
The  most  practicable  line  of  advance  would  seem  to  be  through  the 
setting  up  of  permanent  Standing  Commissions  to  investigate  and 
watch  particular  problems  and  make  recommendations  about  them 
to  the  conference  of  the  League  to  form  the  subject  of  resolutions 
which  would  then  be  carried  down  to  the  separate  sovereign  Parliaments. 
There  is  no  space  to  go  into  these  problems  in  detail ;  but  the  mention 
of  such  questions  as  Labour  legislation,  migration  and  conflicts  of 
standard  of  life,  conservation  of  the  world's  resources,  the  export 
of  capital  and  foreign  loans  and  concessions,  the  control  and  improve- 
ment of  world-communications,  is  sufficient  to  show  how  inextricably 
economic  problems  are  now  bound  up  with  foreign  affairs  and  public 
policy  all  the  world  over,  and  how  valuable  a  dispassionate  and 
authoritative  statement  about  them  might  be  in  influencing  opinion 
and  moulding  the  policy  of  governments.  The  days  when  economic- 
internationalism  spelled  the  negation  of  official  action  are  gone  past 
recall.  If  the  world  wishes  to  organise  its  life  on  a  peaceful  basis, 
it  must  habituate  itself  to  the  idea  of  international  governmental 
organisation.  It  must  learn  to  think  of  itself  as  a  single  society  and 
to  disentangle  those  of  its  social  problems  which  are  common  to  all 
its  members  and  can  only  be  dealt  with  by  the  common  action  of  the 
governments  concerned,  from  the  larger  body  of  questions,  such  as 
taxation  and  fiscal  policy,  wrhich  are  primarily  matters  of  local  and 
national  concern.  Above  all,  mankind  must  have  the  courage  to 
judge  both  economic  and  national  issues  from  an  ethical  standpoint 
and  to  adjust  its  policies  and  institutions,  whether  in  government  or 
in  business,  to  that  wider  point  of  view.  In  this  great  task  of  changing 
the  motives  which  have  hitherto  been  dominant  in  our  economic  policy 
and  relationships,  and  of  bringing  them  into  harmony  with  the  Golden 
Rule,  the  working-class  movement  which,  whatever  its  other  failures, 
has  never  bowed  the  knee  to  commercialism,  may  well  find  one  of  the 
mainsprings  of  its  activity  in  the  generation  after  the  peace.  If  the 
great  European  working-class  leaders  rise  to  the  height  of  the  oppor- 
tunity they  will  interpret  the  mind  and  conscience,  not  of  their  class  only 
but  of  a  world  which  is  learning  through  suffering  the  true  meaning 
of  civilisation. 


MR.  ZIMMERN,  speaking  on  his  paper,  said  that  he  had  raised  three 
points  :  (1)  How  far  was  this  war  a  capitalist  war,  and  what  were  the 
relations  between  our  general  economic  system  and  the  war  ?  (2)  The 
economic  situation  which  would  arise  in  the  immediate  post-war 
period — the  transition  period  after  the  war  ;  and  (3)  Economic  questions 
of  an  international  kind  which  ought  to  form  the  subject  of  deliberations 
in  a  future  League  of  Nations.  He  suggested  that  most  of  the  dis- 
cussion should  be  devoted  to  the  second  point.  There  was  a  great 
deal  of  nonsense  being  talked  about  Morocco,  and  the  bourgeoisie,  and 


73 

the  wicked  capitalist  ;  but  there  was  a  fundamental  truth  underlying 
these  wild  statements.  He  had  tried  in  his  paper  to  sum  it  up  by 
saying  that  governments  should  go  into  business  in  a  spirit  calculated 
to  maintain  the  world's  peace.  It  was  not  wrong  for  Germany,  or  France, 
or  this  country  to  be  interested  in  questions  of  foreign  trade. 
Questions  of  foreign  trade  and  fiscal  policy  were  important  to  us 
as  citizens — they  could  not  be  left  to  the  merchants  of  Bir- 
mingham, and  we  could  not  say  they  were  no  concern  of  ours  as 
individuals  ;  we  had  to  approach  them  in  the  spirit  of  our  political 
ideals.  Passing  on  to  his  third  point — the  economic  side  of  the  work 
of  a  League  of  Nations — Mr.  Zimmern  said  it  was  tremendously 
important  that  we  should  form  a  fairly  clear  picture  of  the  kind  of  way 
in  which  international  organisation  would  work  after  the  war.  He 
imagined  that  there  might  be  set  up — perhaps  at  the  Hague — a  body 
which  should  meet  every  year- — consisting  of  delegates  from  the 
Parliaments  of  the  countries  composing  the  League.  They  would  not 
pass  laws,  but  their  function  would  be  to  pass  resolutions  and  to  form 
the  public  opinion  of  the  whole  civilised  world.  It  would  be  necessary 
to  have  attached  to  this  body  a  number  of  Standing  Commissions  to 
investigate  and  to  report  on  the  problems  which  should  come  up  for 
consideration.  The  working  class  leaders  of  the  democracies  would 
have  an  enormous  opportunity  in  such  a  gathering,  as  they  would  be 
working  on  behalf  of  the  whole  civilised  world,  and  not  merely  with  their 
own  country  at  heart.  In  this  way,  he  thought,  the  question  of  the 
conservation  of  the  world's  resources  and  the  many  other  questions 
containing  within  themselves  the  possibility  of  wars,  could  be  peace- 
fully settled  and  carried  to  the  legislatures  of  the  various  countries 
and  there,  it  might  be  hoped,  made  the  subject  of  legislation  by  the 
democratic  parties  in  those  countries. 

Returning  to  his  second  point,  he  said  that  it  was  very  important 
to  get  a  clear  picture  of  the  international  economic  position  in  the 
immediate  post-war  period.  When  peace  negotiations  began,  the 
economic  problem  of  the  needs  of  the  world — food,  clothing,  shelter, 
etc. — would  seem  more  urgent  than  any  other.  And  even  before  the 
end  of  the  war  the  shortage  of  necessary  commodities  would  become  the 
most  prominent  problem  in  the  whole  situation — not  only  here,  but  in 
Germany  and  Austria.  He  was  certain  that  we  should  have  neither 
Free  Trade  nor  Protection  in  the  immediate  post-war  period. 
With  the  shortage  of  shipping  and  of  supplies  of  every  kind  it  would 
be  impossible  to  have  unrestricted  trade.  We  should  have  regulated 
trade,  with  some  system  of  licenses  such  as  we  had  at  present.  It  was 
ludicrous  to  think  of  having  a  tariff  on  imports,  which  meant  making 
it  more  difficult  for  goods  to  come  in,  at  a  time  when,  owing  to  the 
shortage,  all  countries  would  have  to  set  up  a  system  of  magnets  to- 
draw  supplies  from  all  over  the  world  ;  instead  of  having  import 
prohibitions  we  should  have  import  inducements.  There  were  certain 
countries,  such  as  Brazil,  which  produced  monopolies.  Those  countries 
could  levy  export  taxes,  and  make  the  whole  world  pay  more.  The 


74 

countries  which  produced  primary  commodities  would  be  in  a  very 
favourable  position.  There  would  be  no  more  talk  about  dumping — 
we  should  beg  the  foreigners  to  dump  things  on  us.  This,  of  course, 
applied  to  the  immediate  post-war  period.  During  this  period  the 
shortage  of  supplies  would  absolutely  necessitate  some  form  of  govern- 
mental action,  and  the  matter  must  come  up  at  the  Peace  Conference. 
Governmental  action  would  almost  necessarily  lead  to  international 
action,  for  the  shortage  was  a  world  shortage  and  the  problem  was  a 
world  problem.  This  was  a  field  of  work  in  which  the  international 
idea  could  take  root  for  the  first  time,  and  thus  a  beginning  could  be 
made  in  international  organisation. 

In  conclusion,  he  said  that  the  whole  future  of  a  good  settlement 
depended  on  the  atmosphere  of  the  various  parties.  The  worst  thing 
the  Germans  had  done  was  to  destroy  confidence,  and  yet  everything 
depended  on  confidence.  The  economic  question  would,  by  its  urgency, 
be  the  first  to  come  up,  and  on  the  way  in  which  it  was  settled  would 
depend  the  atmosphere  in  which  the  people  who  negotiated  the 
other  questions  would  approach  their  work.  The  problem  of  supplies 
must  be  handled  in  a  way  which  was  in  tune  with  the  aspirations 
for  which  we  believed  we  were  fighting  in  this  war. 


QUESTIONS. 

Question  :  Does  the  speaker  think  that  as  soon  as  the  war  is  over 
we  shall  tolerate  buying  anything  from  Germany  ? 

Answer  :  So  far  as  the  private  purchaser  is  concerned,  Germany 
will  in  any  case  find  it  very  difficult  to  sell  her  goods  ;  so  far  as 
governments  are  concerned,  it  depends  upon  the  peace  negotiations, 
and  the  kind  of  Germany  we  have  to  deal  with  then. 

Question  :  How  are  we  to  reconcile  this  position  of  no  tariffs  with 
the  statements  recently  made  by  the  Tariff  Reform  League,  and  with 
Mr.  Hewins'  position  in  the  government. 

Answer  :  People  in  this  country  are  very  much  slower  to  change 
their  opinions  than  facts  are  to  change  themselves.  If  you  ask  me 
about  tariff  reformers,  I  am  inclined  to  think  they  are  still  talking 
in  terms  of  the  pre-war  situation,  and  that  some  of  the  things  they  are 
asking  for  will  be  clearly  impossible  in  face  of  the  post-war  situation. 
As  regards  Mr.  Hewins  and  Colonial  preference,  the  only  official 
statement  that  we  have  about  Colonial  preference  was  a  statement  by 
the  Prime  Minister,  suggesting  that  preference  might  be  given  other- 
wise than  by  tariff,  e.g.,  by  improved  communications.  Sir  Robert 
Borden  has  spoken  in  the  same  sense.  It  must  be  obvious  that  when 
we  are  subsidising  the  loaf  to  keep  food  cheap,  we  are  not  likely  to 
put  a  tariff  on  foodstuffs — Mr.  Lloyd  George  made  that  point  himself. 


75 

Question  :  Are  we  reconciled  to  Government  intervention  in  forming 
what  are  really  trusts  for  the  brass  workers  of  Birmingham  in  offering 
them  not  only  advice,  but  also  money,  in  order  to  further  their  export 
trade  ? 

Answer  :  It  may  or  may  not  be  desirable  that  the  brass  workers 
or  any  other  industry  in  the  country  should  form  an  association  and 
work  together  more  closely,  but  that  surely  has  nothing  necessarily 
to  do  with  tariffs.  In  fact,  if  closer  association  tends  to  more  efficient 
production,  to  that  extent  it  makes  the  tariff  less  necessary  and  reduces 
the  outcry  for  it. 

Question  :  Did  I  understand  the  lecturer  to  say  that  if  the  League 
of  Nations  was  set  up,  that  the  representatives  would  be  appointed 
from  Parliament  ?  Does  he  not  think  that  in  view  of  the  importance 
of  preventing  future  wars  it  would  be  desirable  to  draw  better  people 
from  elsewhere  ? 

Answer  :    The  remedy  is  to  get  better  people  into  Parliament. 

Question  :  If  in  a  League  of  Nations  the  representatives  are  only  to 
be  chosen  from  amongst  the  politicians  (and  the  Labour  Party  do  not 
seem  likely  to  have  a  majority  even  in  the  next  election),  will  the 
working-class  leaders  get  much  chance  of  being  chosen  ? 

Answer  :  .1  suppose  the  delegates  will  be  chosen  in  proportion  to 
their  numbers  in  the  House,  and,  after  all,  the  influence  of  a  party  or 
of  a  party  leader  does  not  depend  entirely  on  numerical  superiority. 
If  you  get  such  men  as  Branting,  Bernstein,  Renaudel,  or  Vander- 
velde,  men  who  have  very  wide  knowledge  and  have  thought  deeply 
on  these  questions,  one  man  like  that  will  carry  more  weight  than 
fifty  ordinary  rank  and  file  members  of  Parliament.  On  a  proportional 
system  some  Labour  leaders  are  certain  to  get  there. 

Question  :  Is  it  not  almost  impossible  to  hope  that  the  Labour  Party 
will  return  men  of  the  character  of  Mr.  Branting  ? 

Answer  :    That  is  why  we  have  conferences  like  this  ! 

Question  :  I  understand  that  the  lecturer  argues  that  Capitalism 
had  nothing,  or  very  little,  to  do  with  this  war.  How  far  is  this  re- 
conciled with  the  statement  that  the  international  armament  firms 
have  agents  in  different  countries  whose  object  is  to  foment  the  spirit 
of  warfare. 

Answer  :  I  am  quite  of  opinion  that  some  capitalist  interests  have 
benefited  by  the  war,  but  I  should  have  thought  that  in  this  country 
at  any  rate  we  were  strong  enough  to  prevent  these  people  influencing 
our  national  policy. 


76 

• 

Question  :  In  the  minds  of  many  this  is  a  trade  war.  What  does 
the  lecturer  think  ? 

Answer  :  If  this  war  was  started  as  a  trade  war,  I  believe  it  is  the 
worst  speculation  the  traders  have  ever  embarked  upon  ! 

Question  :  What  does  the  lecturer  think  would  be  the  effect  upon  any 
industry  of  the  total  prohibition  of  imports  for  a  given  period  after 
the  cessation  of  hostilities.  Several  of  the  departments  set  up  by  the 
government  have  already  advised  total  prohibition. 

Answer  :  In  this  matter  we  have  the  example  of  Germany  to  guide 
us — several  industries  have  been  closed  down  altogether,  and  the 
workers  have  gone  into  the  army  or  been  put  on  to  other  work.  The 
Board  of  Control  for  the  industry,  selected  which  firms  should  be 
shut  up  and  which  should  survive  for  the  rest  of  the  war.  It  is  obvious 
if  an  industry  depends  on  certain  imports,  and  the  imports  are  not 
there,  the  industry  sooner  or  later  will  suffer.  Supposing  you  have 
only  a  certain  amount  of  tonnage  and  can  only  import  a  certain  number 
of  things,  you  have  to  adopt  the  principle  of  priority,  and  choose 
which  you  will  import — e.g.,  the  choice  between  wheat  or  pianos. 
After  all,  the  social  need  is  more  important  than  the  need  of  any  par- 
ticular industry. 

Question  :  Does  the  lecturer  not  think  that  as  the  economic  interests 
are  the  major  ones,  the  people  pursuing  these  have  used  the  political 
machinery  for  questions  of  peace  and  war  ? 

Answer  :  To  some  extent,  yes.  To  find  out  what  extent  we  should 
have  to  discuss  the  whole  European  foreign  policy  for  the  last  fifty 
years. 

Question  :  As  regards  State  control.  Does  Mr.  Zimmern  not  believe 
that  the  only  line  of  progress  is  the  nationalisation  of  industry  and 
State  control  ?  And  further,  if  his  answer  is  in  the  affirmative,  whether 
he  believes  that  a  protectionist  policy  would  not  tend  to  form  monopolies 
and  trusts,  and  if  this  be  the  case  whether  State  control  and  nationalisa- 
tion of  industry  is  not  the  only  line  of  progress  ? 

Answer  :  I  am  in  favour  of  State  control  during  $he  immediate 
post-war  period,  but  I  am  not  in  favour  of  the  complete  nationalisation 
of  all  the  industries  in  this  country.  I  should  be  in  favour  of  an  increase 
in  State  responsibility  in  that  way,  but  to  ask  the  State  now  to  take 
over  all  industries  does  not  seem  to  me  practicable. 

Question  :  As  regards  Free  Trade  and  Protection  after  the  war. 
Does  the  lecturer  believe  that  the  only  line  of  progress  from  the  labour 
standpoint  is  to  offer  inducements  by  a  protectionist  policy  in  order 
to  encourage  monopolies  and  trusts  because  that  would  be  the  easiest 
way  for  the  State  to  take  control  ? 


77 

Answer  :  It  may  be  desirable  to  encourage  monopolies  under  State 
control  in  certain  industries,  to  have  a  greater  amalgamation  of  firms 
and  to  put  them  under  State  control  or  ownership  ;  but,  on  the  other 
hand,  this  is  not  necessarily  bound  up  with  Protection.  In  some 
industries — as  for  example,  the  building  trade — you  could  not 
have  Protection  at  all.  I  should  separate  these  two  questions 
entirely  and  treat  the  question  of  monopoly  (or  syndication  or  closer 
working,  or  whatever  you  call  it)  quite  separately.  I  certainly  think 
that  a  great  deal  of  improvement  could  be  effected  by  closer 
working  together  in  various  industries,  and  that  raises  questions  with 
regard  to  Labour  representation  and  control  which  ought  to  be  very 
carefully  gone  into  by  Labour  bodies.  The  question  of  Protection  is 
quite  different.  My  own  opinion  is  that  the  war  has  been  an  extraordinary 
justification  of  Free  Trade  finance,  but  that  we  shall  not  get  back  to  the 
Protection  v.  Free  Trade  controversy.  What  we  are  more  likely  to  get  is  a 
very  sharp  division  on  the  question  of  who  is  to  pay  the  war  debt— direct 
v.  indirect  taxation.  If  you  look  back  on  old  Tariff  Reform  literature,  and 
consider  the  amount  of  revenue  which  they  hoped  to  get  by  a  general 
tariff,  you  will  see  how  infinitesimal  that  amount  is,  compared  with  the 
five  or  six  hundred  millions  that  we  shall  have  to  raise  after  the  war 
for  current  expenditure  and  interest  on  war  debt.  The  hopes  of  getting 
revenue  from  a  tariff  have  vanished,  and  the  prospects  of  direct  taxation 
have  been  increased  beyond  anything  we  dreamt  of.  The  whole  question 
of  Protection  looked  at  from  a  revenue  point  of  view  will  be  quite 
different  after  the  war. 

Question  :  In  regard  to  the  increase  of  wealth.  Should  not  the  State 
take  over  banking  and  credit  ? 

Answer  :  That  is  very  difficult.  I  do  not  know  enough  about  it  to 
answer  the  question  properly.  The  fact  that  certain  industries  make 
large  profits  is  not  a  sufficient  reason  for  taking  them  over. 


tion :    Is  it  not  necessary  to  grant  some  sort  of  preferential 
treatment  to  our  Colonies  and  present  Allies  ? 

Answer  :  I  think  we  do  grant  preferential  treatment.  We  are 
always  being  asked  about  Colonial  preference,  but  we  have  given 
them  far  more  than  they  have  ever  given  us.  It  is  true  that  Canada 
gives  us  a  preference  of  33J,  but  we  have  given  them  defence  for  over 
a  century.  I  think  we  are  on  the  right  side  of  the  balance,  but  I  am 
quite  prepared  to  consider  whether  it  is  a  feasible  thing  to  tax  ourselves 
for  the  sake  of  benefiting  producing  interests  in  those  countries,  though 
I  do  not  see  any  good  reasons  for  doing  so  at  present. 

Question  :    To  whom  is  the  war  debt  owing  ? 

Answer  :  It  is  owing  to  the  people  of  this  country,  and  to  the  people 
of  America,  and  on  the  other  hand  we  have  a  good  deal  owing  to  us 
by  Italy,  Boumania,  and  other  countries. 


78 

DISCUSSION. 

MR.  NAYLOR  (London  Society  of  Compositors),  in  opening  the  discussion. 
read  the  following  paper  : — 

I  find  myself  in  agreement  with  most  of  what  Mr.  Zimmern  has 
said  and  written  on  this  subject,  although  not  seeing  eye  to  eye  with 
him  in  all  his  conclusions.  Very  wisely,  he  opened  his  paper  with  a 
few  questions  and  definitions,  with  a  view  to  keeping  the  discussion 
free  from,  misunderstanding.  I  purpose  to  follow  him  in  this  direction, 
in  order  that  our  differences  may  not  take  anyone  off  the  track  of  the 
argument . 

Here  are  his  leading  questions  : 

How  far  are  economic  causes  at  the  root  of  the  present  war  ? 

What  is  the  connection  between  the  existing  economic  system 
and  the  international  antagonisms  out  of  which  the  war  has 
sprung  ? 

What  is  meant  by  the  phrase  "  a  capitalist  war  "  ?  Is  it  a  war 
waged  by  bourgeois  governments  in  which  the  working-class 
as  such  has  no  concern  ? 

What  bearing  has  the  answer  to  these  questions  on  the  problem' 
of  the  better  organisation  of  international  relations  after  the 
war  ? 

I  will  answer  these  questions  in  my  own  words,  so  that  Mr.  Zimmern 
and  others  may  see  that  my  point  of  view  is  very  much  the  same  as 
his.  Let  me  say  at  once  that  it  is  almost  impossible  to  escape  the 
conclusion  that  the  war  is  due  to  economic  causes.  I  agree  with 
Mr.  Zimmern's  view  that  the  war  is  not  in  the  interests  of  the  capitalist 
class  in  general. '  No  class,  as  a  class,  derives  advantage  from  a  state 
of  war.  War  must  reduce  capital  values,  as  it  also  reduces  wage 
values.  That  certain  sections  of  both  capital  and  labour  incidentally 
gain  through  war  conditions  does  not  destroy  that  contention,  for  the 
great  mass  of  the  people  always  stand  to  lose.  In  addition,  all  classes 
contribute  largely  to  the  sinking  fund  of  human  life  and  suffering  that 
is  being  built  up  to  liquidate  the  wrongdoings  of  a  perverse  civilisation. 
It  may  be  said  of  war  as  of  many  other  institutions — the  few  gain 
while  the  many  lose.  The  economic  causes  at  the  root  of  the  war 
are  not  specially  related  to  capital  or  to  capitalistic  institutions.  It  is 
an  economic  war  because  it  originates  in  a  desire  for  national  expansion 
— not  for  national  aggrandisement  but  for  national  well-being  (as  that 
is  understood,  rightly  or  wrongly,  by  capitalistic  governments).  It  is 
a  war,  nominally  of  governments,  but  through  them  of  nations  or 
peoples.  And  the  nations  or  peoples  must  be  prepared  to  accept  the 
responsibility.  Whatever  may  have  been  the  causes  of  war  centuries 
ago,  to-day  they  are  brought  about  by  the  necessity  for  national 
economic  development,  which  is  drawn  along  the  lines  of  territorial 
expansion.  Who  would  pretend  that  the  murder  of  the  heir  to  the 


79 

Austrian  throne  was  the  real  cause  of  the  war,  except  in  so  far  as  that 
murder  may  have  arisen  out  of  Servia's  desire  for  the  expansion,  to 
which  Austria  was  one  of  the  main  obstructions  ?  Again,  the  violation 
of  the  neutrality  of  Belgium  was  merely  a  secondary  cause  of  Great 
Britain's  entry  into  the  war.  The  underlying  reason  was  that  Belgium's 
position  of  neutrality  offered  a  partial  guarantee  against  aggression 
on  the  part  of  Germany — an  aggression  founded  upon  Germany's 
desire  to  remove  the  obstruction  of  Britain  and  France  in  the  markets 
of  the  world,  by  military  means  if  necessary.  Likewise,  we  may  assume 
that  Germany  went  to  war  to  preserve  her  economic  independence 
as  well  as  her  integrity  as  a  nation  :  Austria's  quarrel  was  Germany's 
long-delayed  opportunity  for  securing  by  force  what  she  was  otherwise 
in  danger  of  losing.  These  conclusions  appear  to  me  to  be  incontro- 
vertible. International  relationships,  despite  the  diplomatic  tissue 
in  which  they  are  obscured,  all  tend  in  the  same  direction — namely, 
towards  preserving  and  extending  the  nation's  position  in  the  economic 
struggle  for  existence.  As  with  individuals  so  with  nations,  the 
strongest  will  survive — though  Germany  has  yet  to  learn  that  the 
most  unscrupulous  are  not  necessarily  the  strongest. 

I  therefore  agree  with  Mr.  Zimmern  when  he  says  that  Capitalism 
did  not  cause  the  war  :  whether  it  was  the  Kaiser  or  Rothschild  who 
pulled  the  trigger  seems  to  me  immaterial :  the  explanation  as  to  why 
the  trigger  was  pulled  and  Europe  plunged  into  the  war  is  to  be  found 
as  he  suggests,  in  the  philosophy  of  self-interest — that  is  to  say,  national 
self-interest.  The  fact  that  these  conditions  prevail  under  a  capitalistic 
system  of  society  does  not  prove  that  the  capitalistic  system  is  itself 
responsible  for  war.  So  long  as  the  nations  are  separately  governed, 
and  maintain  an  absolute  political  and  economic  independence  one 
from  another,  so  long  will  war  be  possible,  no  matter  how  high  may  be 
their  state  of  social  and  political  development.  Behind  all  outward 
expressions  of  force,  whether  it  take  the  form  of  an  ultimatum  or  a 
tariff — behind  the  hand  of  a  peaceable  but  insistent  diplomacy — 
is  the  international  struggle  to  live  under  the  best  possible  conditions. 
With  present  relationships,  force  is  the  only  court  of  appeal  for  a 
disappointed  nation.  Nation  allies  with  nation  when  geographical 
or  commercial  interests  synchronise.  Groups  of  nations  are  formed 
with  interests  in  common.  And  thus,  in  place  of  a  single  combatant 
on  each  side,  we  have  a  world  divided  into  two  armed  camps.  For 
which  unhappy  condition  of  affairs  a  League  of  Nations  is  the  only 
effective  remedy.  I  may  now  be  permitted  to  summarise  my  answers 
to  Mr.  Zimmern's  four  leading  questions,  by  which  it  will  be  seen  that 
there  is  little  real  difference  between  us  : 

Economic  causes  are  at  the  root  of  the  present  war. 

There  is  no  direct  connection  between  the  existing  economic  system 
— if  by  that  he  means  the  capitalistic  system — and  the  international 
antagonisms  out  of  which  the  war  has  sprung. 


80 

It  is  not  a  war  waged  by  bourgeois  governments,  in  which  the  working 
class  has  no  concern,  but  a  war  of  nations,  in  which  all  classes  are 
involved. 

That  is  the  position  as  I  understand  it :  and  Mr.  Zimmern  will  agree 
that  there  is  no  fundamental  difference  between  his  analysis  and  my 
own.  In  regard  to  the  solution  of  the  problem  he  has  set  us,  I  find 
him  more  suggestive  than  determinative,  and  therefore  not  so  easy 
to  follow,  while  his  impartiality  leaves  a  frontal  attack  quite  out  of 
the  question,  supposing  I  were  inclined  to  be  pugnacious. 

For  instance,  I  fail  to  trace  the  connection  between  national  indus- 
trial adjustments  and  international  relationships.  I  do  not  agree  with 
his  view  that  the  war  has  effectually  disposed  of  the  idea  of  State 
ownership  in  place  of  private  enterprise.  At  the  same  time,  I  do  not 
think  this  question  should  enter  into  the  present  discussion  of  capitalism 
and  international  relationships.  The  same  remark  applies  to  his 
intermediate  region — industrial  self-government.  These  are  matters 
of  national  concern  ;  whereas  war,  as  I  have  endeavoured  to  show,  is 
independent  of  all  questions  of  purely  domestic  administration.  As 
Mr.  Zimmern  rightly  points  out  in  a  later  paragraph,  the  economic 
task  which  the  settlement  will  impose  will  be  the  securing  of  supplies 
upon  which  the  recuperation  of  the  peoples  depends.  That,  however, 
is  a  temporary  difficulty  only.  The  more  important  question  is  the 
setting-up  of  machinery  to  solve  the  permanent  problems  of  inter- 
national relationships.  That  machinery  can  be  used  for  dealing  with 
the  situation  immediately  following  the  conclusion  of  peace  as  well 
as  for  the  primary  object  of  avoiding  future  wars.  Mr.  Zimmern 
rightly  draws  attention  to  the  serious  character  of  the  question  of 
post-war  supplies.  Of  what  use  are  capital,  and  labour,  and  orders 
to  employ  both,  if  the  raw  materials  of  industry  are  denied  us  ?  .Of 
what  avail  are  all  these  if  food  supplies  are  unprocurable  ?  Blockades 
are  not  necessarily  a  condition  of  war.  They  may  be  enforced  in  times 
of  peace  also.  Certain  it  is  that  there  will  not  be  sufficient  raw  material 
to  satisfy  the  demands  of  the  world's  markets  for  many  years  after 
the  conclusion  of  the  war,  while  it  is  equally  certain  that  food  supplies 
will  not  be  normally  distributed  until  several  successive  harvests 
and  an  increase  of  shipping  have  enabled  the  necessary  adjustments 
to  be  made.  It  is  for  the  nations  to  say  whether  they  will  leave  these 
adjustments  to  be  made  without  any  attempt  at  scientific  international 
control  or  will  set  up  some  form  of  machinery  that  will  secure  justice 
to  the  smaller  or  weaker  nations. 

Admitting  as  we  must  that  international  relationships  in  the  future 
must  not  be  governed  by  sectional  alliances,  or  be  at  the  caprice  of  any 
single  nation  or  ruler,  we  are  forced  to  a  decision  on  Mr.  Zimmern's  pro- 
posals for  an  International  Commission  or  a  League  of  Nations,  whose 
functions  shall  include  the  settlement  of  the  question  of  post-war  supplies 
as  well  as  the  larger  problem  of  international  peace.  The  practical  conclu- 
sion at  which  Mr. Zimmern  arrives  is  that  to  avoid  a  promiscuous  scramble 
aftei  the  war  for  food  supplies  and  raw  material,  the  nations  must 


81 

be  rationed.  Certainly  if  something  of  the  kind  is  not  done  there  are 
grim  tragedies  to  be  enacted  in  the  post-war  period,  when  the  weaker 
or  poorer  nations,  or  the  least  favoured  nations,  may  be  almost  strangled 
in  the  struggle  for  existence,  To  meet  this  problem  is  our  immediate 
task.  An  International  Commission,  on  which  every  nation  shall  be 
represented,  must  be  set  up,  in  conjunction  with,  or  independent  of, 
a  League  of  Nations.  The  question  of  admitting  the  Central  Powers 
is  one  that  cannot  be  left  to  the  future  to  decide.  There  must  be  no 
outsiders — no  non-unionists  among  the  nations  ! 

There  will  be  two  immediate  objects  before  the  International  Commis- 
sion :  (1)  To  secure  food  supplies  for  necessitous  countries  ;  and  (2)  To 
secure  raw  material  and  shipping  for  countries  whose  industrial  position 
may  be  seriously  j  eopardised  for  lack  of  them .  We  shall,  I  think,  have  to 
distinguish  between  the  shortage  of  food  supplies  and  the  shortage  of 
materials.  The  supply  of  food  to  a  country  threatened  with  famine  is  sub- 
ject to  human  considerations  ;  the  shortage  of  materials,  though  its 
ultimate  results  may  prove  to  be  the  same,  is  a  question  of  trading.  What 
means,  then,  is  the  International  Commission  to  adopt  to  achieve 
the  two  objects  in  view  ?  In  national  business  life  one  insures  against 
risks  of  all  kinds  as  a  matter  of  course.  Is  it  practicable  to  apply  a 
similar  principle  of  insurance  to  international  risks  of  the  two  kinds 
mentioned,  or  to  one  of  the  two  ?  Let  me  suggest  a  basis  for  discussion 
of  this  point.  The  countries  comprising  the  International  Commission 
might  contribute  on  an  agreed  basis  to  a  common  fund,  to  be  used 
for  the  assistance  of  distressed  nations  in  regard  to  food  supply  only. 
Any  nation  would  be  entitled  to  claim  assistance,  and,  on  proving  its 
case,  would  be  granted  the  necessary  supplies.  To  obtain  these  supplies 
the  Commission  would  have  to  be  invested  with  compulsory  powers  of 
purchase  in  any  market :  that  is  to  say,  they  would  be  given  priority 
over  all  other  purchasers,  but  would  pay  the  market  price  for  whatever 
is  purchased.  This  condition  of  compulsory  purchase  would,  of  course, 
be  a  vital  part  of  the  scheme.  For  it  should  be  borne  in  mind  that  the 
difficulty  of  some  nations  will  not  be  a  question  of  ability  to  pay,  but 
of  opportunity  to  purchase.  Hence  the  necessity  of  granting  the 
International  Commission  powers  of  compulsory  purchase,  enforced 
by  the  respective  Governments.  Food  supplies  should,  I  think,  be 
regarded  as  a  free  gift  to  a  nation  in  actual  social  distress  ;  and  the 
supplies  should  take  the  form  of  immediately  consumable  foodstuffs, 
to  be  distributed  among  its  own  people  by  the  receiving  government. 
In  the  case  of  the  raw  materials  of  industry,  I  suggest  that  the  functions 
of  tlie  International  Commission  should  be  confined  to  the  issue  of 
compulsory  purchase  certificates  to  nations  whose  claims  have  been 
favourably  decided  by  the  Commission.  As  already  pointed  out,  the 
difficulty  will  be  one  of  opportunity  to  obtain  rather  than  of  ability 
to  pay  ;  and  by  the  issue  of  these  priority  certificates  that  difficulty 
would  be  overcome.  I  do  not  suggest  that  any  attempt  to  equalise 
the  conditions  among  the  nations  will  be  practicable  :  the  intention 
is  to  safeguard  a  nation  from  suffering  a  virtual  blockade  through 


82 

inability  to  obtain  supplies  or  transport.  With  raw  materials  of  industry 
I  would  bracket  shipping  and  transport.  These  priority  certificates 
would  be  used  by  the  accepting  government,  who  would  pass  on  the 
material  so  obtained  to  their  own  traders  at  their  own  terms. 

I  will,  in  conclusion,  summarise  the  proposals  under  consideration.  The 
Labour  Party's  recommendation  urges  systematic  arrangements  on  an 
international  basis  for  the  allocation  and  conveyance  of  the  available 
exportable  surpluses  to  the  different  countries  in  proportion  to  their 
needs.  That  recommendation  includes  foodstuffs,  raw  materials, 
and  shipping.  Mr.  Zimmern  takes  us  a  step  farther  and  proposes 
that  the  various  governments  shall  delegate  powers  to  purchase,  allocate, 
and  convey  supplies  on  their  behalf  to  an  International  Commission, 
which  would  become  a  Relief  Commission  for  the  world,  rationing  each 
country  according  to  its  need.  My  own  suggestion  carries  us  a  little 
farther  in  the  settlement  of  details  :  First,  that  the  question  of  the  supply 
of  food  should  be  separated  from  that  of  the  supply  of  raw  material  and 
transport ;  and  secondly,  that  the  food  supplies  shall  be  in  the  nature 
of  relief,  provided  at  the  expense  of  a  common  fund,  while  the  division 
of  raw  material  and  shipping  shall  be  arranged  by  the  issue  of  priority 
certificates  for  compulsory  purchase  in  the  open  market.  The  weakness 
of  the  Labour  Party  resolution  is  that  it  proposes  to  deal  only  with 
"  available  exportable  surpluses,"  which  limits  the  powers  of  the 
International  Commission  to  that  definition  whatever  it  may  imply 
and  whatever  they  may  decide  it  means.  Mr.  Zimmern's  plan,  by 
placing  the  obligation  of  purchase,  allocation,  and  conveyance  upon 
the  Commission,  is  asking  for  a  big  draft  upon  the  trustfulness  of  the 
nations  in  the  business  capacity  of  the  Commission,  and  imposes  far 
too  onerous  a  task  for  any  body  of  men,  much  more  when  they  are 
the  representatives  of  various  nationalities  and  interests.  The  diffi- 
culties of  the  Stockholm  Conference  that  was  to  be,  the  difficulties 
«ven  of  the  Inter-Allied  Labour  Conference  that  was,  would  seem  to 
prove  the  impossibility  of  any  scheme  of  international  rationing. 
The  view  I  take  is  that  the  international  business  of  the  world  shall, 
as  far  as  possible,  be  left  to  itself  and  the  International  Commission 
called  in  only  on  the  direct  representations  made  either  for  food,  for 
material,  or  for  transport.  Within  each  country,  however,  it  will  be 
necessary  for  the  Government  to  retain  such  control  as  they  have  at 
present  in  the  interests  of  social  justice  and  in  conformity  with  social 
needs.  Probably  no  problem  in  the  world's  history  has  put  such  a 
tax  upon  the  wit  of  man  for  solution  as  that  which  faces  civilisation 
at  the  conclusion  of  the  war.  We  shall  have  cause  to  be  thankful  that 
the  exhaustion  of  war  will  make  it  necessary  for  the  nations  to  seek 
the  solution  by  other  means  than  those  of  physical  force,  and  by  getting 
together  and  reasoning  together,  work  out  the  salvation  of  humanity 
in  accordance  with  the  Golden  Rule.  The  awakening  democracies 
of  the  world  East  and  West  are  determined  that  there  shall  be  no 
more  war  ;  and  neither  Kaisers  nor  Tzars,  nor  Kings,  nor  Governments 
will  be  allowed  to  stand  in  the  way  of  the  realisation  of  that  resolve. 


83 

GENERAL  DISCUSSION. 

ME.  PARKIN  (York  Equitable  Society)  said  on  one  or  two  points 
he  had  come  to  different  conclusions  from  Mr.  Zimmern.  He  would 
like  Mr.  Zimmern  to  deal  with  a  point  which  he  would  try  to  explain. 
For  the  last  fifty  years  Great  Britain  had  been  spreading  out  her 
tentacles  all  over  the  globe,  and  to  a  great  extent  had  allowed  the 
capitalist  somewhat  of  a  free  hand.  A  pamphlet  came  into  his  hands 
some  time  ago  which  proved  that  France  and  Great  Britain  had  made 
an  alliance  with  Morocco  to  the  exclusion  of  Germany,  and  that  other 
arrangements  had  been  made  so  that  eventually  Germany  was  forced 
fco  see  that  she  was  being  crowded  out  of  a  place  in  the  sun.  These 
were  the  real  factors  that  had  brought  about  the  war  which,  if  true, 
condemned  us  as  a  nation.  He  would  like  to  ask  if  the  lecturer  does 
not  think  that  instead  of  capital  pulling  the  strings  of  our  politicians, 
and  forcing  on  this  war,  that  the  democracy  of  this  country  should  have 
a  voice  in  affairs,  and  demand  that  capitalism  should  not  have  a  free 
hand  ?  He  was  confident  that,  had  a  vote  been  taken  in  all  the  countries 
who  were  contemplating  war,  the  democracies  would  have  voted 
against  it. 

MR.  STRAKER  (Northumberland  Miners)  :  On  page  61  Mr.  Zimmern 
quotes  from  "  Socialism  and  War,"  in  which  the  writer  states  that  it 
is  not  a  capitalistic  war  ....  because  war  is  not  good  business. 
If  that  frees  capitalism  from  being  the  cause  of  war,  I  am  inclined  to 
think  that  it  will  free  the  worker  and  everybody  else.  I  don't  see 
that  it  has  been  good  business  for' us,  but  the  fact  is  that  if  the 
capitalists — or  whoever  were  the  cause  of  the  war — had  seen  the 
present  result  of  it,  they  probably  would  have  hesitated.  We  know 
perfectly  well  that  the  Germans  were  going  to  be  in  Paris  in  a  few 
months,  and  that  before  Christmas  we  were  going  to  be  in  Berlin — 
that  is  the  light-hearted  way  in  which  all  parties  entered  the  war. 
But  on  another  page  (68)  he  says  that  capitalism  cannot  make  wars. 
If  governments  do  not  make  wars,  capitalists  could  not  possibly  make 
them ;  and  one  asks  oneself  the  question  :  Who  are  the  capitalists 
and  who  are  the  people  who  constitute  the  Government  ?  Government 
eompetition  at  the  present  time  is  but  the  competition  of  individual 
capitalists  expressing  itself  through  the  medium  of  the  Government. 
The  capitalist  class  complained  to  the  Government  of  what  they 
ealled  unfair  German  competition  which  must  be  stopped,  and  appealed 
to  the  Government  to  do  what  they  could  to  stop  it.  The  inception 
may  lie  even  further  back.  I  sometimes  think  that  at  the  bottom  our 
Christian  missionaries  are  to  blame.  They  send  home  beautiful 
reports  of  the  wealth  of  the  countries  to  which  they  go,  and  at  once 
the  interest  of  the  capitalist  is  stirred,  and  he  gets  some  Commission 
sent  out  by  the  Government  to  make  enquiries.  After  that,  big  guns 
follow  to  Christianise  the  people  !  Notwithstanding  all  that,  Mr. 
Zimmern  proposes  that  the  Government  should  take  over  the  whole 
business.  I  am  a  little  afraid  that  the  League  of  Nations  will  fall  to 


84 

pieces  when  the  countries  composing  the  League  fail  to  agree.  There 
is  nothing  to  stop  war  but  the  growing  intelligence  of  the  people  and 
of  democracy. 

Mr.  THICKETT  (Walsall  Trades  Council)  said  that  the  Boer  war  was 
a  capitalist  war,  and  when  this  war  was  over  it  would  be  found  that 
it  was  on  the  same  plane,  but  there  was  nevertheless  a  prospect  of  a 
better  land  for  the  people  when  peace  came. 

MR.  SMITH  (Machine  Workers) :  Mr.  Zimmern  condemns  State  control, 
and  it  appears  to  me  that  the  basis  of  his  condemnation  is  the  experience 
gained  as  a  result  of  the  war.  That  is  hardly  fair,  as  I  think  we  have  to 
admit  that  private  enterprise  failed  to  stand  the  test  of  war,  with  the 
result  that  the  Government  stepped  in  and  proved  conclusively  that 
it  was  in  the  national  interest  it  should  take  control.  Surely  then,  if. 
as  a  war  emergency,  it  is  essential  for  the  State  to  take  control,  in  the 
interests  of  the  well-being  of  the  country,  that  control  should  be 
continued.  I  think  the  majority  of  the  representatives  who  have 
spoken  in  this  conference  have  agreed  that  State  control  is  essential, 
and  that  Labour  wants  it.  Labour  all  along  the  line,  especially  as 
regards  the  future,  is  fighting  with  that  object  in  view,  and  Labour 
must  itself  decide  what  are  the  easiest  and  quickest  methods  by  which 
Nationalisation  and  State  control  can  be  brought  about.  I  believe 
that  by  a  Protectionist  policy  (I  am  no  advocate  of  Tariff  Reform)  we 
shall  encourage  monopolies  and  trusts,  and  when  this  has  come  about, 
I  hold  that  it  will  be  far  easier  to  pass  a  scheme  for  State  control  and 
Nationalisation  than  it  will  be  by  a  Free  Trade  policy.  With 
nationalisation  in  all  countries  as  a  condition  of  peace,  problems 
connected  with  commercial  policy  and  controversies  as  to  peace  or 
war  would  cease  to  exist. 

MR.  MILLINGTON  (Birmingham  Co-operative)  :  In  reply  to  the  last 
speaker,  would  it  not  be  better  instead  of  encouraging  monopolies,  to 
develop  voluntarily  the  co-operative  ideas  along  the  lines  on  which 
they  are  now  working  ?  There  is  no  doubt  in  the  mind  of  the  worker. 
I  think,  that  the  seed  of  all  war  is  greed  and  selfishness.  This  may 
find  expression  through  Trade  which  may,  in  the  future  as  it  has 
done  in  the  past,  use  the  politicians  in  and  out  of  Parliament.  In 
this  way  quarrels  have  been  engendered  between  the  nations,  and  then 
the  workers  generally  have  a  lot  of  high-flown  stuff  thrown  at  them 
about  patriotism  and  all  the  rest,  and  we  only  know  the  causes  that 
led  to  the  war  through  what  we  are  told,  not  by  having  a  free  voice  in 
suggesting  what  or  how  things  should  be  done.  When  we  think  of  all 
the  secret  diplomacy,  through  whichever  channel  it  comes — the  trade 
organisations  or  the  capitalist  press — it  amounts  to  the  same  thing, 
that  quarrels  are  engendered  that  we  have  to  pay  and  suffer  for.  How 
can  we  stop  it  in  the  future  ?  Mr.  Zimmern  very  pointedly  said  that 
the  first  and  primary  thing  we  have  to  see  to  when  we  get  the  League 
of  Nations  is  to  inspire  confidence  between  those  who  meet  on  our  and 


85 

other  people's  behalf.  I  am  suggesting  that  if  we  and  our  Allies  can 
be  self-dependent,  cannot  we  have  a  League  of  Nations  without  the 
Germans  ?  I  hope  we  shall.  We  have  seen  enough  of  them  in  this 
country.  If  we  can  be  self-supporting,  let  us  go  on  our  own  and  leave 
them  to  take  their  own  course.  We  need  not  be  revengeful,  but  I 
think  we  have  had  enough  of  them. 

MR.  DEWSBURY  (Walsall  Co-operative)  :  Mr.  Zimmern  states  that 
the  commercial  policy  under  which  we  work  is  at  fault,  and  that  it 
is  wise  to  abolish  the  system.  We  have  his  views  on  private  ownership 
of  capital,  and  yet  when  he  is  questioned  as  to  whether  he  would 
nationalise  it,  he  begins  to  hedge,  and  says  he  would  in  some  industries, 
and  not  in  others.  It  seems  to  me  rather  inconsistent  that  he  should 
state  very  emphatically  that  the  present  system  is  wrong,  and  yet  have 
no  definite  remedy  for  putting  the  matter  right.  To  nationalise  Finance 
will  not  be  sufficient,  because  capital  knows  no  country  ;  nor  will 
even  the  nationalisation  of  Industry  be  sufficient.  The  remedy  is 
to  internationalise  the  whole  of  labour,  commerce,  industry,  and 
capital.  Mr.  Zimmern  said  that  victory  depends  on  industrial  power. 
The  industrial  workers  are  the  source  of  our  industrial  power  ;  they 
are  going  to  win  the  war  for  us,  and  will  largely  have  to  pay  for  it. 
I  want  to  know  who  they  have  to  pay  ?  When  Mr.  Zimmern  says  that 
the  commercial  system  is  wrong,  I  should  say  that  the  financial  system 
is  wrong  also.  War  is  the  result  of  selfishness,  and  the  whole  present 
system  seems  to  me  to  engender  selfishness.  Wealth  ought  to  be 
owned  internationally. 

MR.  RUDLAND  (President  Birmingham  Trades  Council)  :  I  believe 
the  Boer  War  was  a  capitalist  war,  and  there  is  very  little  difference 
in  the  present  war  except  in  its  widespread  disastrous  results.  The 
Junker  class  are  responsible  for  the  present  conflagration — they 
dominate  the  show  and  make  the  working-class  pay  the  piper.  At 
bottom  this  is  a  capitalist  war,  and  to  a  large  section  of  the  country 
the  war  is  profitable.  You  cannot  serve  God  and  Mammon  :  the 
one  represents  the  highest  form  of  service  without  greed,  and  those 
who  serve  the  other  are  simply  out  to  make  money — they  are  the 
soulless  capitalists  who  are  the  cause  of  this  war.  It  is  no  use  trying 
to  put  it  on  to  the  German.  For  the  Central  Powers  it  is  an  economic 
war  for  expansion,  as  they  had  no  outlet  for  their  shipping.  The  so- 
called  alliances  to  preserve  the  balance  of  power  are  underhand 
businesses.  The  capitalists  of  Germany,  France,  Austria,  Italy,  and 
all  the  other  countries  are  the  real  enemies  we  have  to  fight,  for  they 
engender  war  through  the  press. 

MR.  ARGYLE  (Club  and  Institute  Union)  :  The  causes  of  this  war 
are  economic.  Germany  needed  expansion,  or  at  any  rate  she  thought 
she  needed  it.  She  was  not  satisfied  with  her  great  progress,  and  she 
set  to  work  to  get  rid  forcibly  of  hindrances  to  further  expansion, 
and  very  carefully  prepared  herself  over  a  long  series  of  years  for  that 


86 

end.  I  happen  to  have  been  closely  associated  for  many  years  with 
a  man  who  was  a  deep  thinker,  widely  respected,  and  a  man  of  very 
great  experience  in  international  trade.  He  said  to  me  fully  ten  years 
ago  that  we  should  have  war  with  Germany  sooner  or  later — that  it 
was  quite  inevitable,  because  Germany  could  see  no  other  way  of 
getting  what  she  wanted  than  by  war.  I  think  this  has  been  very 
fully  borne  out.  It  is  all  nonsense  to  believe  that  Germany  tried  all 
she  could  to  prevent  this  war  :  Germany  was  determined  to  have  it. 
She  was  only  waiting  for  a  fitting  opportunity,  and  when  that  oppor- 
tunity came  she  thought  she  was  strong  enough  to  conquer  the  world, 
then  she  went  at  it.  Of  course  she  had  to  have  an  excuse,  and  she  had 
no  great  difficulty  in  finding  it.  It  is  not  true,  in  my  opinion,  to  think 
that  it  was  only  the  richer  classes  in  Germany  who  were  behind  the 
war.  I  believe  the  whole  German  people  were  permeated  with  the 
idea — I  do  not  say  it  was  so  originally,  but  that  by  years  and  years 
of  teaching  they  were  in  that  frame  of  mind  that  they  believed  they 
must  come  out  triumphant  after  their  enormous  preparations.  The 
whole  course  of  the  war  and  what  has  happened  has  fully  borne  that 
out.  I  do  not  agree  that  we — either  capitalists  or  workpeople — in 
any  way  wished  for  the  war  or  are  responsible  for  it :  I  think  that  we 
tried  our  best  to  avoid  it,  and  as  it  was  only  when  we  were  absolutely 
in  the  position  that  we  could  not  keep  out  of  it  without  sacrificing 
every  vestige  of  honour  and  sense  of  decency  that  we  resolved  that 
we  must  come  in  to  protect  the  interests  of  the  world  against  the 
grasping  spirit  that  was  embodied  in  Germany.  I  think  we  ought 
to  clear  that  up.  I  do  want  to  take  my  stand  as  a  Britisher.  I  do 
believe  that  we  are  in  the  right  in  regard  to  this  war,  and  that  we  were 
thoroughly  justified  in  going  into  it. 


MR.  ZIMMERN'S  REPLY. 

I  agree  pretty  well  with  all  that  Mr.  Naylor  has  said,  except  on 
one  or  two  points  of  detail.  He  drew  a  distinction  with  which  I  do 
not  agree  between  the  control  of  foodstuffs  and  industrial  raw  material. 
He  said  one  was  a  question  of  humanity,  the  other  merely  a  question 
of  trade.  When  people  have  not  got  boots  or  clothes  that  will  keep 
them  warm  you  have  got  beyond  trade.  I  think  if  you  were  in  Belgium 
or  Poland  to-day  you  would  feel  that  the  question  of  clothing  people 
was  just  as  much  a  matter  of  humanity  as  the  question  of  feeding 
them  ;  you  cannot  draw  any  distinction  between  these  things.  If 
you  have  an  international  body  to  meet  the  social  needs  of  the 
populations,  that  body  will  have  to  decide  frankly  on  the  grounds 
of  humanity  what  things  shall  be  imported  in  order  to  promote 
recuperation  most  quickly. 

Here  is  another  point  which  indicates  the  extraordinary  difficulty 
of  setting  up  an  international  body  of  this  character.  You  speak  of 
giving  it  compulsory  powers  of  purchase  in  all  the  markets  of  the 


87 

world  at  fair  prices.  That  sounds  very  easy,  but  it  is  not  going  to  be 
easy  at  all.  Do  you  think  the  people  in  Argentine  who  have  a  great 
deal  of  wheat  and  wool  to  sell,  and  who  are  in  the  fortunate  position 
of  having  half  the  world  wanting  to  buy  from  them,  will  put 
up  with  very  much  less  than  the  highest  price  they  can  got  ? 
I  have  seen  a  statement  in  the  paper  that  the  British  Government 
has  had  some  difficulty  in  persuading  the  Boer  farmers  to  sell  the 
South  African  wool  clip  to  the  British  Government :  they  were  able 
to  persuade  Australia.  During  the  past  50  years  the  capitalists  in 
manufacturing  countries  have  had  a  pretty  good  time  ;  now,  by  a 
curious  turn  of  the  wheel,  the  raw-material  producing  countries  like 
South  Africa,  Argentine,  and  Brazil  are  in  a  very  favourable  position. 
Everybody  is  coming  and  asking  for  their  stuff,  and  it  will  not  be  at 
all  easy  to  make  an  arrangement  with  them.  Let  me  draw  attention 
to  another  fact  :  We  talk  about  the  British  Empire  as  a  unity,  but 
on  matters  of  fiscal  policy  it  is  not  a  unity.  For  instance,  in  matters 
like  the  South  African  wool  clip  ;  as  we  are  not  Prussians,  and  do  not 
govern  in  their  way,  the  purchase  has  to  be  arranged  by  persuasion. 
I  do  not  wish  to  say  that  these  difficulties  will  make  the  problem  of 
the  world's  supplies  of  these  articles  insoluble,  but  you  see  what 
delicate  negotiations  are  involved,  and  how  much  easier  it  is  to  settle 
them  here  than  to  carry  them  out.  Japan  is  getting  an  enormous 
chance  now  :  they  are  very  anxious  to  get  a  foothold  in  new  markets. 
If  you  went,  say,  to  South  America,  you  would  find  Japanese  goods  sold 
in  places  where  you  never  saw  them  before — e.g.,  textiles.  You  are  up 
against  a  great  number  of  conflicting  interests.  This  may  make  an  inter- 
national commission  very  much  more  difficult  than  it  looks  on  paper,  but 
because  it  is  difficult,  there  is  no  reason  for  despairing  ;  it  is  for  us  to  try 
to  see  the  thing  as  the  other  chap  sees  it.  Someone  raised  a  question 
of  Morocco  :  I  did  not  want  to  go  into  the  question  of  capitalist  policy 
before  the  war,  but  I  would  say  that  the  German  desire  for  a  place  in 
the  sun  was  very  largely  due  to  the  fact  that  they  were  afraid  that  the 
British  policy  of  the  open  door  would  not  be  followed  in  the  future. 
It  has  been  followed  up  to  date,  and  though  no  one  knows  what  would 
have  happened,  as  a  matter  of  fact,  the  German  merchants  were 
quite  free  to  come  into  British  markets.  I  will  quote  an  example — a 
very  remarkable  fact  which  I  have  seen  quoted  both  in  a  German  and  an 
American  book*;  the  proportion  of  British  capital  invested  in  Egypt- 
which  was  the  quid  pro  quo  for  Morocco — has  not  increased  since  the 
British  occupation  of  Egypt.  It  is  not  true  to  say  that,  by  occupying 
Egypt,  we  have  made  it  the  happy  hunting  ground  of  our  capitalists  : 
other  nations  had  equal  rights,  and  have  exercised  them.  If  you  ask 
me  whether  any  Powers  in  this  war  were  guiltless,  with  respect  to  some 
of  the  matters  raised  this  afternoon — whether  they  had  no  blot  on  their 
escutcheon  at  all,  I  would  say  they  are  all  to  blame  in  a  greater  or  lesser 
degree.  Mr.  Straker  made  a  remark  that  "  government  competition 


See  Appendix. 


88 

is  but  the  competition  of  individual  capitalists  expressing  themselves 
through  the  Government."  This  is  much  too  harshly  stated. 
A  Government  has  a  great  many  interests  :  it  is  not  merely  a 
Government  of  calculating,  grasping  capitalists ;  and  Mr  Straker 
really  refuted  his  own  argument  by  mentioning  tariffs,  for  the 
Government  which  entered  on  this  war  was  a  Free  Trade  Government. 
We  are  much  too  apt  to  use  a  bludgeon  in  these  matters  where 
the  truth  is  very  difficult  to  arrive  at.  Similarly  with  regard 
to  missionaries.  They  have  done  a  great  amount  of  good  in 
Africa  and  other  places,  and  have  formed  a  great  counteracting 
influence  to  the  capitalist  who  sells  gin,  whiskey,  and  muskets.  In 
some  cases  missionaries  have  been  a  bad  influence,  and  may  involuntarily 
have  led  to  undesirable  governmental  exploitation,  but  we  must 
not  be  unjust  to  a  body  of  men  who  have  done  an  enormous  amount  of 
good — e.g.,  Livingstone.  Mr.  Smith  raised  a  point  in  connection  with 
the  question  of  State  Socialism.  I  did  not  in  my  paper  deal  directly 
with  Nationalisation  ;  what  I  said  was  that  the  war  had  shown  that 
undiluted  State  ownership  and  undiluted  State  control  such  as  has 
been  exerted  through  the  Munitions  Department  has  been  the  cause 
of  a  good  deal  of  resentment.  That  is  why  we  have  cases  of  agitation. 
I  am  not  in  favour  of  a  relaxation  of  State  control.  I  do  not  want 
to  abolish  the  Factory  Acts,  but  I  want  a  greater  measure  of  autonomy 
for  the  workers  themselves  who  know  the  conditions,  but  the  State  must 
retain  its  overriding  power,  because  otherwise  you  might  get  workers  and 
employers  combining  to  defraud  the  rest  of  the  community.  Mr. 
Dewsbury  says  I  have  hedged  about  my  attitude  on  the  economic 
system.  I  have  not ;  what  I  want  first  and  foremost  is  a  change  of 
motive — such  a  change  you  can  get  if  you  set  up  an  international 
body.  As  Mr.  Dewsbury  says,  if  you  get  National  Socialism  there 
will  still  be  competition  between  one  State  and  another,  and  for  this 
reason  he  would  internationalise  the  whole  of  industry,  com  mere*', 
and  '  finance.  This  is  a  very  large  order.  The  inter-Allied 
Conference  showed  you  how  very  difficult  international  organ- 
isation is.  We  have  to  proceed  towards  further  nationalisation 
and  to  alter  the  motive  in  all  industries,  and  that  will  have  this  rather 
curious  result :  it  will  promote  direct  taxation,  because  the  great 
argument  against  direct  taxation  is  that  you  cannot  tax  people  high 
because  you  destroy  the  incentive  which  leads  them  to  make  money  ; 
if  you  change  the  nature  of  the  incentive  from  profit  to  service  they  will 
not  so  much  mind  being  taxed.  With  regard  to  my  attitude  on  the 
war,  I  agree  whole-heartedly  with  everything  President  Wilson  has 
said  since  his  address  to  the  Senate  last  January. 


89 
APPENDIX. 


Since  the  Conference  met,  Mr.  Zimmern  has  kindly  supplied  the 
following  extracts  from  the  books  mentioned  on  page  87. — -EDITOR. 

"  England's  share  in  the  trade  of  Egypt  before  the  occupation  was 
57  per  cent.  ;  in  1891  it  was  only  54  per  cent.  ;  in  1913  it  had  fallen 
to  37  per  cent." — BEER  :  The  English-speaking  Peoples  "  (New  York, 
1917),  p.  304. 

"  If  one  looks  at  the  figures  of  the  trade  of  Great  Britain  with  her 
Colonies  they  by  no  means  bear  out  the  contention  that  it  is  simply 
due  to  the  fact  that  they  are  British  Possessions  and  that  they  were 
occupied  as  Colonies  in  order  to  promote  British  trade.  Take,  for 
instance,  Egypt,  which  has,  since  1883,  been  under  the  exclusive 
control  of  England.  Has  England's  trade  with  Egypt  increased  in 
the  same  proportion  as  it  would  have  done  had  Egypt  remained  inde- 
pendent ?  It  is  of  course  impossible  to  give  an  absolutely  certain 
answer  to  this  question,  but  the  following  figures  are  at  least  suggestive  : 

British  Trade  with  Egypt  in  Million  £'s. 

Imports  from  Egypt.    Total  Imports. 

1872      16.5         . .  354.7 

1912  25.9  744.9 


Increase   ....        9.3=56%  396.2-111% 

Exports  to  Egypt.  Total  Exports. 

1872      7.3         . .  314.6 

912  9.6  599.6 


Increase   2.3=31%  285.0=90% 

England's  trade  with  Egypt  has  thus  increased  in  a  lesser  proportion 
than  her  total  trade.  We  have  no  reason  to  assume  that  had  Egypt 
not  been  occupied  the  normal  operation  of  economic  factors  would 
have  caused  it  to  increase  any  less."- — KAUTSKY  :  The  National  State, 
The  Imperialist  State,  and  The  Federal  State  (Nuremberg,  1915),  pp.71-72. 


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